Removing the option to compress old files from the registry will solve your
problem at the cost of removing the option. I would recommend keeping the
option but changing the parameters of the option. You see, disk cleanup
hangs because the volume of old files to compress is too large. Reduce the
volume of the files and disk cleanup will compress the files very quickly.
To change the parameters do this: Run disk cleanup. In the "Disk Cleanup
for (C)" window, under the "Disk Cleanup" tab, highlight "Compress old
files" then click the "Options" button in the "Description" field. Increase
the number of days to wait before compressing old files, thereby, reducing
the volume of the files to be compressed. (Stay within an easy size, say
25,000 KB or any size you want that will not cause Disk Cleanup to hang).
When the volume reaches "0" reduce the number of days to wait, say to 20,
and run Disk Cleanup, from then on, once a week. You should never have the
problem your having now, again. If you do, then remove the option with the
"reg" file mentioned above and don't worry about it, because Windows
compresses old files automatically every 60 days or so.
Good Luck, John