Out of curiosity, how large is the C drive. How much free space is shown on the C drive?
I believe the error does relate to the recovery partition drive. It is a known Vista bug. Just dealt with a clients Vista HP that was doing the same thing. C:, the OS drive, had plenty of room. But the restore partition was almost full with just the image as well as some files the client had stored on it. Even after running Windows disk clean up and TFC on the C drive as well as moving the Clients files off of D, Vista was still complaining.
The fix I am aware of involves a registry change. Are you comfortable working in the registry?
Short of someone else knowing another solution, way to fix your current problem, I will post the fix along with instructions on how to back-up your registry prior to making the change. Also. Be aware that this change affects both C and D. Should they ever start filling up again you will get no warning other then pop-ups that say insufficient space when you try to d\l to large a file, install to big a game\program.
Edited by ThunderZ, 12 February 2011 - 10:23 PM.