Windows XP - like Windows Me - includes System Restore, which enables you to return your computer to an earlier state (called a restore point), removing/replacing certain system & application files, without effecting your own files such as documents, e-mail, etc. Windows XP's System Restore doesn't seem to be as big a resource hog as the Windows Me version was claimed to be.

I would suggest that you leave System Restore running, it might one day save you! However, by default System Restore is monitoring all the hard drives in your system, which might not be necessary. To customize which drives should be excluded, start System Restore (Start > All Programs > Accessories > System Tools > System Restore and click on the System Restore Settings link.

Select the drive for which you want to change the System Restore settings, and press the Settings button. You can change the amount of disk space used by System Restore on the selected drive, or turn System Restore monitoring off for the selected drive.

There is also a setting to Turn off System Restore on all drives, this could be useful if you are using a 3rd party product such as GoBack (or others).

Microsoft Knowledge Base Articles Relating to Windows XP System Restore: