New
#21
ad 1) had the wife read the black picture, LOL. Looks like you have 9.5GBs of free space on C. So it is beyond me why you get this messgae. But why do you have so much stuff on C. The system with a good selection of programs should be less than 30GB. Do you have games installed.
as2) It frres up as much space as the size of your RAM. If you have 16 or 32GB of RAM, that is significant for a small SSD. With 2 or 4GB of RAM, it does not make a big difference.
I think we are a bit stuck with your original problem - at least I am. Here are a couple of suggestions from the net. Not sure whether they help.
http://answers.microsoft.com/en-us/windows/forum/windows_7-windows_programs/windows-7-why-cant-i-install-anything-says-full/8ae1069e-2d39-4b0b-80de-d0c8048e0227
http://support.microsoft.com/kb/187876