Windows 7: Restore point Disk space question

I have about 3 or 4 % of my drive space set aside for restore points. My question is, what happens if that space is fully taken up. Does Windows 7 delete the oldest restore point information to make way for new?

yes

System Protection - Change Disk Space Usage

Yes Windows 7 will delete the oldest restore point(s) until it has sufficient space for the new one.

It is always wise to give the back up partition sufficient space, so that back ups can remain on the drive for more than a few days. There have been many posts, indicating that a problem had ocurred and that SR, could not solve the problem because it did not go back far enough.

I realize that there are people out there that do not have that much room to devote for a restoration drive. My advice to them is to make a system image, put it on an external hard drive and update it once a month. In that case, whatever problem you encounter you have the ability to make things right with a current system image. In fact my advice to everyone is to follow the advice on creating a current system image. There is software out there that, in my opinion, surpasses the capability of Windows system image and it is free, Paragon

http://www.paragon-software.com/home/db-express/