So, I fired up WinDirStat (a nice tool which gives you summary of folders and the disk space they are taking) and found out that Google Chrome caching was using 406 MB on my machine (folder: C:\Documents and Settings\<myUserId>\Local Settings\Application Data\Google\Chrome). More shocking was the fact that 7 GB of data was residing inside c:\windows\Installer (which is not related to Google Chrome)!
A quick search on the net revealed a tool called MSIZAP from Microsoft which can be used to remove orphaned patches and installation files. Surprisingly, I already had the tool located in C:\Program Files\Microsoft SDKs\Windows\v6.0A\bin\MsiZap.Exe; thanks to locate32 (another must have utility to get blazingly fast searches for your files).
You run the tool with G! switch to remove orphaned installation packages, as shown below:
This freed up some 5GB space on my machine with apparently no problems since yesterday.
Warning: MSIZAP is dangerous if you don't know what you are doing!