how to increse c drive to install wine applications

Normally the C drive in wine is /home/<user>/.wine/drive_c (or such, don't have a wine installation at the hand)
Is the windows XP drive such low on space?

The "C:" drive in Wine is not really a drive. It's a folder on your hard drive. Wine tricks the Windows programs into thinking it's the C: drive. Consequently, if you have a standard installation of wine, the amount of space reported to the Windows program is the amount of space the user has available in the home directory.

Sounds like you have either (i) a permissions problem, (ii) a quota on how much hard drive space the system will allocate to your home folder, or (iii) your "free space" is not in the same partition as the Wine folder. Of the three, my bet would be on the last.

Post the results of the following command:

      df -h

Happy Trails,

Loye Young

help

Sorry for the delay.Out put of the df -h is:
masani@ubuntu:~$ df -h
Filesystem Size Used Avail Use% Mounted on
/host/ubuntu/disks/root.disk
                      3.7G 792M 2.8G 23% /
tmpfs 236M 0 236M 0% /lib/init/rw
varrun 236M 212K 235M 1% /var/run
varlock 236M 4.0K 236M 1% /var/lock
udev 236M 2.9M 233M 2% /dev
tmpfs 236M 104K 235M 1% /dev/shm
/dev/sda8 25G 11G 15G 41% /host
lrm 236M 2.0M 234M 1% /lib/modules/2.6.27-11-generic/volatile
/dev/loop1 939M 489M 403M 55% /home
/dev/loop2 3.7G 2.0G 1.6G 56% /usr
/dev/sdb1 2.0G 1.4G 533M 73% /media/disk
masani@ubuntu:~$

The partition Wine is using is the one for your /home partition: /dev/loop1 939M 489M 403M 55% /home
That partition only has a gigabyte of space, which is why you are running into issues. If using a separate /home partition, in general you want most of the free space on the system going there.

Thanks Scott Ritchie, that solved my question.