In the longterm you need to free your data from the Installation. If your HD is full you're probably due for a fresh OS install.
Every year or so your OS should be reinstalled *ducks*
You ducking because you said "every year"? I probably do a reinstall every 6-9 months on
something around my house - well at least things that get lots of software installed/uninstalled on them. The linux server and my wife's iMac are the only exceptions to this - although my audio server and HTPC don't because the software never changes and they aren't even used for web browsing unless it's to download an updated driver.
With drives as cheap as they are now - I really can't come up with a reason to struggle with space unless it's a situation like BSA mentioned - where you have a small capacity SSD for speed - and something else for space. Otherwise I regularly see 1TB drives going for $50-75 at Fry's when they have a sale - and even at full price they're less than $100.
Also, if you are looking for a good disk imaging program - and can't afford Norton Ghost...
take a look at PING (Partimage Is Not Ghost). It's a free, bootable linux environment that makes images (including bootable ones). I use it all the time to backup/restore workstations at my office.
The main reason I reiterate the "NEW HD" suggestion from Hemlock is that based on the sizes of your drives (which appear to be a 40GB and an 80GB) - I have to also assume that they date back to ~2004 and perhaps earlier if they came in the computer when it was purchased.
I'm glad to see you're planning backups because they may come in handy soon.