Without going through all the details and hours I spent struggling to make this stupid program cough up about 21GB of consumed space and still having misc. data lost in that black hole I finally found a solution that worked perfectly for me. If you want to turn off offline folders permanently follow this:
- disable offline folders using the manage offline folders from sync center (requires reboot)
- Open an elevated command prompt (right-click, run as administrator)
- Type these commands:
cd %systemroot%\Windows
takeown /f csc /r /a /d y > NUL
icacls csc /grant Administrators

F) /t /l /q
- Delete folders under c:\Windows\CSC
Got this from:
Need to delete \csc Folder, "Access Denied" even in safe mode - Vista Forums
Not sure if you'll be able to get offline files back after this but I didn't care

much better programs out there to sync my files than this...