Generally I use the windows based disk clean up utility. It does a fairly well job, though their are better programs; as far as what to delete - I delete everything that says temperary or internet. I don't save cookies, or any downloaded temporary images. I would not erase old or archive because as cache-man said they may be backup utilites.
To optomise your system I would suggest removing, Temporary files(they should be automatically erased after a set period of time any way, but they buid up quickly), temporary internet files(theses make websites appear to run faster by downloading the images to hard dive), downloaded program files, and the recycling bin( DO THIS A WEEK OR SO AFTER THE REST SO YOU CAN UNDO IF YOU MESS UP)