1) you can delete the hot fix files, just don't do it from Add/Remove;
that will un-do the hot fix, which is not what you want. doing a google
for "hotfix backup remove" you'll find this:
http://www.dougknox.com/xp/utils/xp_hotfix_backup.htm
2) all those files in System Volume Information are your restore points.
Using Disk Cleanup (in accessories | system tools), on the More Options
tab, there is a button that deletes all except the last restore point.
My advice if your system is running just fine right now and you are sure
you won't need to restore to an earlier date, is to 1) use System Restore
to CREATE a new restore point; call it "Good". Then 2) use Disk Cleanup
to delete all but that latest restore point. Note when using Disk Cleanup,
click the "delete all but last restore point" button, which does its
thing, then click CANCEL; clicking OK does all the _OTHER_ disk cleanup
things on the main tab, which may not be what you intended.
Finally, System Restore by default sets aside a LOT of HD space for its
restore points (12% of the HD capacity). You can lower this via a tab in
the "System" control panel. 500 MB would seem to be plenty. Remember, if
your machine is turned on a lot, the system will make a new restore point
automatically every ~3 days, and it keeps them around for about 90 days.
You can tweak these times w/ a registry change if you're brave; google for
it. The system also often makes a restore point before it installs new
software (depending on the installer tool that was used). Best advice:
just lower the amount of space you allow it to use (500MB to 1 GB) and let
it do its thing! You never know when it might save your butt!