There really is nothing that can be done to reduce the space of the WINDOWS folder. If you have Windows Vista, it will take up way more space than any other operating system. You could downgrade to XP or upgrade to Windows 7.
You can try disk-cleanup. Open "My computer". Right click on a drive > Properties. Then click on "Disk Cleanup". Usually you can safely remove "Temporary internet files", empty your recycle bin etc. You can also try cleaning old system restore files.
Windows can take up a lot of space on your hard drive. Start by uninstalling any unused programs and fonts. Then you can run the disk clean up utility to remove all your old temporary and unnecessary files. If you still need more space then you should look through your hard drive for folder left from uninstalled programs.
Go to Start, Control Panel, Add/Remove Programs, but then click on Add/Remove Windows Components. Also, go to Start, Programs Accessories, Disk Cleanup and compress old (unused) files (includes Windows).