These folders are in use by the Windows Logon App (winlogon.exe) thus making it next to impossible to delete them. However, if you remove sfcfiles.dll (you don't use Windows File Protection, do you ?) or rename it to something else, such as _sfcfiles.dll, deleting the dirs will be no problem. Note that if you rename the file back to sfcfiles.dll, for example, if you want to check the integrity of your Windows files, and reboot your machine, Windows will automatically recreate the folders . Oh, yes, and be sure to edit dosnet.inf, layout.inf and txtsetup.sif so that they point to the renamed file, otherwise Setup will generate an error message during its text-mode portion.