Since C is your primary partition so AUTOEXEC.BAT, boot.ini, CONFIG.SYS, IO.SYS, MSDOS.SYS, NTDETECT.COM, ntldr are found placed on the first bootable harddisk.
if you open boot.ini you would see this text
[operating systems]
multi(0)disk(0)rdisk(0)partition(2)\WINDOWS="Microsoft Windows XP Professional"
The 2 here would indicate second partition where windows xp is installed which would be D.

For recycle and system information folders, these will be present on all the drives. Recycle will have you contents of recycle bin provided for al the drives, the system volume will contain some filesystem and other OS related informaton.

The pagefile.sys is paging file which windows create by default on first partition. You can change it and bring it to D drive if you want.
Right click on the My computer icon and go to properties, Advanced and then performance section. Then again on Advanced tab and click change in virtual memory.

For the VSNAP.IDX i have no clue what this file is..

I hope your hibernation file is not on C drive, do u see any file named hiberfil? generally that would reside in D drive in your case. Since you say that you have partitioned the hard-disk, i rule out possibility of probable virus attack.

Well i dont think so you should delete both recycle and system volume. But i would suggest two things:-
1. Empty your recycle bin
2. Disable Windows System restore of windows. Right click on my computer icon and properties-> system restore.

Since you would be taking backup of the system, i feel you can disable it on all the drives.

For taking backup, two possible things can be done:-
1. Take a backup of both C and D on G drive.
2. Inless you fiddle around with C drive or virus plays with C drive sys files you can take backup of D and restore whenever you want.

Are you going to use C drive for some specific purpose, because i dont understand why 5GB of C drive? If you intend to keep it as temp files etc, i would suggest you shift the pagefile back to C drive.

Well, i suggest then you move back the pagefile to C drive, since you would not do pretty much of work with it. this would give you more space to work on in D drive. But do empty  you recycle bin, i guess the space issue must be because of that. let me knw if it helped.
I would say you can use the 5GB for moving all temp files like Internet explorer or default temp folder of windows.

But i feel, it would good if you take backup of C and D then, because it would be helpful in case the system is bootable.

Strange.
Well i am not to sure if formatting Cc drive would be good idea.
I feel C drive would be locked by windows so u need to boot into DOS or partition magic to do so..

I had tried this once, but can really remember if by copying the file to D drive and then re-copying back to C would be make system bootable.
On the other hand, even if you format, there is a command using windows XP to recreate the boot sector to make the system again boot up with XP. You need to google it out