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Originally Posted by Don't Panic!
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You can delete index.dat but you'll have to recreate it later by running the welcome.exe file in windows. But before you delete it try going to Start > Settings > System > Memory click on the Running Programs tab and make sure everthong is closed.
HTH
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No need to recreate if you delete, It will be recreated every time you do a soft reset, or open PIE.
Gary