This procedure carries some risk, so please read everything carefully.

Before carrying out this procedure, make sure you have done all the easy things first, like disabling your hibernation file, turning off Windows Restore Points, and generally just following any other easy tips you can find. If you still want to free up more space on your C drive, please follow this procedure.

1. Backup your computer.
2. Turn off Windows Updates for now (so that the Installer folder does not come in to use while you are working with it).
3. Download Junction 1.05. 
4. Extract and copy junction.exe to c:\windows\system32.
5. Download the curiously-named SubInACL.
6. Install SubInACL in its default location.
7. Download move_win_installer_folder.bat and save it somewhere (like your desktop).
   • By default, your Windows Installer Folder will be moved to your D drive.  If you want, you can edit the batch file and change the d:\junctions part of the line that says set target=d:\junctions. Whatever folder you set here, a sub-folder called installer will be created within it.  The folder does not have to exist already.
8. Double click on the move_win_installer_folder.bat file to run it.  Note: You may be asked to accept the licence agreement for Junction after you start the batch file.
9. That’s it!  The batch file will show you the results of its operations.
10. Turn Windows Updates back on.

If you are technically minded and want to know what the batch file does, see my earlier post which describes the steps that can be carried out manually.

The batch file looks like this…

Moving the Windows Installer folder can potentially ruin your Windows installation. Please follow the instructions carefully.

You should start by creating a full backup of your computer. If you make a mistake, Windows may delete your Installer folder, rendering certain future installs and updates impossible.

I should also point out that I have only tested this procedure under Windows XP SP3.  Furthermore, there are lower-risk ways to free up space on your netbook C drive which you should do first -notably disabling and removing the hibernation and page files.

Edit: I have now created a batch file to automate the process.  Please see the Automated Method.

The overview of the procedure is as follows:

1. Copy the c:\windows\Installer folder to another drive.
2. Delete c:\windows\Installer.
3. Create an NTFS Junction Point to make the Installer folder appear to be where it usually is.
4. Set the permissions on the Junction Point and the new folder exactly right so that Windows doesn’t delete them both.

Here are the detailed steps…

1. Backup your computer.
2. Turn off Windows Updates (so that the Installer folder does not come in to use while you are working with it).
3. Download Junction 1.05.  Extract and copy junction.exe to c:\windows\system32 for easy access from the command line.
4. Copy the c:\windows\Installer folder to its new home on another drive, preserving file attributes and permissions.  I’m using d:\junctions\Installer.
5. Make an additional copy of your Installer folder somewhere else, as a backup.
6. On your new Installer folder (d:\junctions\Installer), set the permissions precisely as follows: 
   • Remove inherited permissions.
   • Give local administrators (the group) and system full control.
   • Give everyone read-only access.
   • Remove all other users.
   • Set ownership to the local administrators group.
   • No attributes (e.g. system, hidden, etc.) are required.
7. Delete the c:\windows\Installer folder completely.
8. Create a Junction Point using junction.exe that you downloaded earlier
   • junction c:\windows\Installer d:\junctions\Installer
9. You can use dir /AL within the c:\windows folder to see your junction point shown as such.
10. Open Windows Explorer and browse to your junction point at c:\windows\Installer.  You should see all the files stored in your target folder.
11. When you use Explorer to set the folder permissions on c:\windows\Installer, you are setting the permission for the junction point itself.  Set them on the junction point as you did before for the target folder…
    • Remove inherited permissions.
    • Give local administrators (the group) and system full control.
    • Give everyone read-only access.
    • Remove all other users.
    • Set ownership to the local administrators group.
    • No attributes (e.g. system, hidden, etc.) are required.
12. That’s it!  Now review your permission settings for c:\windows\Installer and d:\windows\Installer and ensure they are exactly as described.
13. Turn Windows Updates back on, if that’s how you normally have them.
14. Reboot your machine for certainty that no process anywhere is somehow caching some information about the way the Installer folder was before.
15. Test that your changes don’t get overwritten by Windows.

Testing

The risk with this procedure, as mentioned before, is that if you haven’t set the permissions exactly right, Windows destroys your Installer folder and creates a new one with the right settings.  The point at which this happens appears to be the next time that the Installer folder needs to be accessed.  To test that this isn’t going to happen to you, you need to perform some install / uninstall / repair type operations using installers that actually utilise Windows Installer technology at this level.  Office 2007 is one example.  See if you can add or remove a component from Office or some other application and check that your junction point and target folder still exist afterwards.