After doing an in-place upgrade from Windows 8.0 to 8.1, File Explorer will not delete the Windows.old folder and prompts for numerous security permissions.
Only perform these steps if you no longer need the 'Windows.old' folder and have recovered all old documents from the previous Windows version. The Users (user profiles and their associated Documents, Music and Video folders) will also be deleted. In other words, if you are still opening the "Windows.old" folder to retrieve files, backup or move that data first.
Delete the folder using File Explorer's Disk Cleanup utility
1. Launch File Explorer (from Desktop, click File Explorer or from the Start Menu charm-menu, click "Search", type "file explorer".
2. On the Tree-side, locate "This PC" (aka, "my computer")
Other-mouse-click the C: drive, choose "Properties"
3. Click "Disk Cleanup"; this will take a few moments to load.
4. Click "Cleanup System Files" (this will take another few moments to load)
|Click for larger view; "X" to return|
5. In the check-box list, click "[x] Previous Windows Installations"
6. In the [More Options] tab, not illustrated here, I also recommend clicking System Restore and Shadow Copies "Clean up". When prompted "Are you sure you want to delete all but the most recent restore point?", click "Delete"
7. Click OK and confirm Delete files.
Windows.old will be removed, freeing up about 4G of disk space.