Removing Win XP SP1 backup

[Starrx05]

When I first isntalled XP on my laptop, it was w/ SP1 only. So I updated to SP2 but it kept a backup of the SP1 in Add/Remove Program in Control Panel so I can revert back. That backup takes up like 400MB. I don't need to keep that so can I just remove it? I've found there's a hiddent folder with "$" which store the backup files. So I just have to delete that? and search the regitry to remove that entry in Add/Remove Program? Or I can just leave it there but it's a waste of space... I'm cleaning up unused stuffs on my laptop.