Hard drive problem - unaccounted for used space

My computer has Windows XP Home on the C drive together with Internt Explorer, CD Burn and Anti Virus programs. These applications took up less than 3 gb of the 8 gb C drive, which is a partition of the 30 gb whole hard drive.
However, Windows now shows the C drive as more than 6 gb full although I have not added anything on.
In Windows defrag application, the graph report showed a huge segment for undefragged files(red), but which would not be defragged by the application. I suspect this is the missing 4 gb of drive space.
Does anyone know why this happened? All the files in the C directory still add up to 2.6 gb not 6 gb. Why is 4 gb unavailable for use in the C drive? Is this due to a bad sector? This computer is only a month old.
Any help will be very much appreciated.

 

 
The usual suspects are System Restore (change settings to a smaller amount), Temporary Internet Files (often set to maximum by default), and, if you have been having any problems, memory dumps.

 

Abraxas, thank you for the prompt reply.
I have cleaned out system restore down to the most recent.
And I have also moved the temporary internet file folder to another drive (D: drive).
But you are right I did have a few problems, some quite major. So what are memory dumps and what can I do about them that might help with my problem?

 

 
You might want to right-click My Computer, Properties and set an amont for System restore. I use the minimum and have used SR successfully, so that should generally be enough space to reserve for it.

Under the Advanced tab, Startup and Recovery you can set the memory dump to None and uncheck Automatically restart. That will prevent these dumps from taking place and also give you a blue screen with an error instead of restarting when an error occurs.

Search for *.dmp to find previous memory dumps and delete them.

Run Disk Cleanup to remove other temp files and compress files that have not been used for a while (NTFS only).

PC Pitstop recommends, for reasons unknown, but a reasonable choice, anyway, that your temp internet file cache be kept at 80 megs to avoid actually slowing down your surfing by long search times through the cache.