Do you have system restore turned on? If not I think its safe to delete (I dont have it on my c drive)
I would turn system restore off then delete it, then if you need system restore turn it back on and create a new restore point.
You should definitely install iespyad as its a registry file that will put your security settings to max on all the (known) sites that use dodgy tactics like that java stuff.
Get iespyad from
http://www.staff.uiuc.edu/~ehowes/resource.htm