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Scenario
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You have a server with an 8 GB system partition and it keeps filling up. The software distribution folder used by windows updates is a major source of bloat and Microsoft support has said there is nothing you can do to move this folder from the C drive.
Solution
Using the Microsoft Junction Tool found on the Systernals site create a symbolic link to another hard drive or partition. I will use the terms symbolic link and junction interchangeably in this post.
Process
Stopping the Windows Update Service and renaming the folder
Start>Run type cmd and press enter type net stop wuauserv and press enter type rename c:\windows\SoftwareDistribution softwaredistribution.oldand press enter
Creating a symbolic link using Junction (Download)
In this example the software distribution folder will be redirected from C:\WINDOWS\SoftwareDistribution to the D:\WINDOWS\SoftwareDistribution
Creating the Junction
To create the target directory from the command prompt
C:\>md D:\Windows\SoftwareDistribution
To create the Junction
C:\>junction C:\WINDOWS\SoftwareDistribution “D:\WINDOWS\SoftwareDistribution”
Restart the Windows Update Service
type net start wuauserv and press enter
Once everything has been verfieid to be working normally delete the softwaredistribution.old folder.
Jeff Loucks
Available Technology 
Is there a way to tell by looking at the redirected folder that it is in redirected mode? I am thinking of times in the future, if someone else is managing a folder that I did this to and they dont know that its been redirected, how could they tell?
You can identify simlinks from the command prompt. – Jeff
Brian,
You are probably already familiar with Simlinks or junctions. The library concept where pictures and documents are redirected is similar.
To determine if a file is a junction, specify the file name:
junction c:\test
To list junctions beneath a directory, include the –s switch:
junction -s c:\
To delete a junction, use the –d switch:
junction -d c:\Program-Files