You're off topic for this forum, which is dedicated to Windows Live OneCare. You may want to try the Microsoft Public newsgroups here: http://www.microsoft.com/communities/newsgroups/list/en-us/default.aspx
I suspect that you are looking at the .Net Framework 3.5 roll-up "important" update for XP. I don't know where you are seeing the file size or where you are getting the error about affecting other programs other than via Add/Remove Programs in Control Panel with show updates checked. Yes, removing this update will potentially be a problem for programs using .Net Framework and also potentially expose you to security issues down the road. My advice is to leave it alone.
Another path for help if it was downloaded via WU, as I suspect, is here:
Windows Update Solution Center - http://support.microsoft.com/ph/6527
-steve
Microsoft MVP Windows Live / Windows Live OneCare & Live Mesh Forum Moderator