Hi

This folder is your Firefox profile. It contains all the files that makes Firefox yours, such as bookmarks, browsing history and passwords as well as any add-ons that you have installed.

Can I delete these files? And, is there any way to limit the files that get added to my profile? It takes forever to defrag these files & that's the problem I'm trying to solve.

There are two different folders for your profile: one with precious and valuable settings, and one with temporarily useful files that you can clear if you like.

The important data is here on XP:

C:\Documents and Settings\username\Application Data\Mozilla\Firefox\Profiles\

If you drill down into profile folders here, you will find, for example, a bookmarkbackups folder.

The temporary data is here on XP:

C:\Documents and Settings\username\Local Settings\Application Data\Mozilla\Firefox\Profiles\

If you drill down into profile folders here, you will find, for example, a cache2 folder.

As you can see, "Local Settings" makes all the difference. If you want to remove the contents of the cache2 folder -- while Firefox is not running -- Firefox will start a fresh cache at your next startup. Or you can use the button on the Options page to clear the cache. See: How to clear the Firefox cache.