Ok heres the story. i had 800mb left and it keeps on going up and down, like one minute it will have 800mb left, then 1gig then now its down to 60mb and sometimes goes back up and i got no idea why.
Most likely temp files and your paging file which will make free space go up and down. I would add another drive and change the location of your temp files and My Documents folder to this new drive. Of course also keeping non-system data on this new drive as well.