Finding out where your space has gone is actually pretty simple. Theres a pretty cool application called TreeSize by Jam Software which puts your HDD usage into a colourful pie chart. Most likely, from much use, your Documents and Settings or Users folder (depending on your OS) is getting pretty cluttered with saved data. This includes preferences from applications in addition to saved webpage data that gets saved by your web browser.

You may wish to clear your browser's data (everything but saved passwords) in addition to doing a routine HDD clean. To do this, right click the drive in My Computer in Win XP, or Computer in Win Vista/7/8, click properties and click the Disk Cleanup button.

When you have done this, to further save some space, you can ensure that the "Compress this drive to save disk space" option is checked in the same properties window. You need only do this once as all new files placed on the drive are automatically compressed after doing this.

Finally, another thing that will fill your drive is routine windows updates - I am guessing that one of the larger folders that treesize points out will be the WINDOWS directory of your HDD.

I don't recommend using the "Compress this drive to save disk space" option, it can often cause more problems and you gain very little space.