I would go ahead and remove that registry key as recommended above.
You can also greatly clean up your disk manually by doing the following:
Delete all temp files (c:\windows\temp\*.tmp)
Delete all temporary internet files:
1. In I.E., click on Tools, Internet Options, Delete Files, select Delete All Offline Content, click OK
2. Then also go into c:\windows\temporary internet files\ and delete whatever's in there
You should use Diskeeper
to defrag, as it's far better than the built-in defragger, and it won't restart like the built-in one does (which restarts every time it encounters an open file or program).
Something else you can do to clean up your disk is get AdAware
, then update its definitions file and run it on a regular basis.