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Yes - and a good idea too as it can become a bit bloated.
Prefetch is where Windows stores certain program information to speed up the loading of programs when they are called. One slight drawback is that it often contains prefetch info for programs you no longer have on the PC and this is not removed by the uninstall process.
Deleting the contents of the folder will do no harm - Windows will re-build it.
The easiest way I know of is with X-Setup ... after installing it, click on X-Setup Default UI - For Power Users, navigate to System > File System > Windows XP Prefetching, click on Prefetch Options, clear the two checkboxes, and either click on the Apply Changes bar or press F9.
You'll have to log off and back on for the change to take place but, after you do, you can delete the C:\Windows\Prefetch folder, and XP won't rebuild it.
Here isanother way. Delete everything in prefetch got to the recycle bin and restore these Layout.ini and NTOSBOOT-BOODFAAD.pf. Start\run\regedit\HKLM\System\CurrentControlSet\Control\SessionManager\Memo ryManagement\PrefetchParameters. Right click on EnablePrefetcher select modify. Change the call for attributes data from 3 to 2. Exit reg restart computer for the change to take effect.