Firstly, my WINDOWS (XP Pro) folder is 2.51GB, 14,189 files, 1,024 folders.
Next, the size of something on your HDD should not slow your computer down. It may slow down file searching using the search utility, but otherwise it has nothing to do with system performance.
If you have a lot of programs installed, they prob. have components installed in the Windows directory, off the top of my head I know about 10 common programs that add components to the WINDOWS directory.
What version of windows do you have? (Pre 95
, 95, 98, 98 SE, ME (
), 2000, Server, XP,Server 2003, XP Media Center Edition, Codename Longhorn), etc?