That one I have decided to leave alone. It's one of the sources for updated files that System File Checker (SFC) will go to when you run it. If there is a newer file in there with the proper authentication signature, it will be selected rather than the older one from your original install CD or the C:\i386 location, as is applicable to your particular installation. It is also use by Windows File Protection (WFP) to instantly replace any improperly deleted files with the proper updated version.
If you choose to delete it anyway, you will be nagged for the SP2
disk when you run SFC or if/when WFP needs it. Incidentally, if you installed SP2
from a CD, this folder will not exist. More about that here: Arie's Registry Hack for SFC
Post #15 has not been disputed yet and may help you understand how the newer files are tracked.
There are other HotFix and SP backups that can safely be deleted.