|'stored in various folders'?|
Dell machines usually have folder containing driver files and sometimes utility install files - but update & updater can be found in filenames all over an XP installation, and I've never known there to be 7GB of Dell files. You don't give any actual folder locations for those files, but I'd guess some are windows files, some belong to other installed apps. If you are running out of disk space, I'd look to remove unwanted software & files and clear out temporary files first. If you're not running out of space, then what's the problem.
Basically, without knowing what all the files/folders you are referring to are called, can't give an informed opinion as to whether its safe to remove them.
btw - it is safe to remove all the 'Dell' applications that they preinstall - obviously if you use any of them, keep them, but any others can be uninstalled (through add/remove programs)