You are correct. Windows does not actually delete files, however they get overwritten eventually.
Here is a Microsoft Knowledge Base
, on how to properly use it. It's pretty straightforward, but a techie here might be able to assist you if you need help.
Using your example, I believe it would look like this:
cipher /w:C:\Documents and Settings\%USERNAME%\Desktop\abc
It doesn't permanently delete something, it overwrites already deleted files; clearing already free space...
Anyways, I don't believe space is the issue. How much RAM do you have installed? 512mb is minimum for XP. 1gb is great.
If I were you, I would leave the files be.. I don't think their doing any harm.