There are a lot of misconceptions about the %WINDIR%\SoftwareDistribution folder, home to the Windows Update data files. This can be seen by the myriad of posts and comments found all over the internet. So here's the real deal about cleaning out the Windows Updates cache.
Note that Windows Update automatically cleans out the cached updates at a regular interval (depending on the age of the cache, etc). If you're running production servers, you usually don't have to manually clean out the cache, unless you have acute disk space trouble. But sometimes it may be necessary to accelerate the process, and that's when the methods of the article come into play.
First of, never *ever* delete the SoftwareDistribution folder. There's never a good reason to manipulate or delete files and/or folders in there, unless you really have an issue with Windows Update. If you only want to remove cached updates, do not delete it, and utilize one of the methods below.
The only truly supported way is to use Disk Cleanup, incorporated in every Windows-client version (Vista, Win7, Win8, ...):
This is the preferred way to clean out the cache, but if you can't use Disk Cleanup, read on to the next part.
If you're unable to use Disk Cleanup (e.g. Server-editions: 2008/2008R2/2012/...), there's one other way to manually remove the updates:
Do not touch any other folder or file in the SoftwareDistribution folder.