That's such a BS solution from EA and makes no sense.
12 Gigs free, and at
most WindowsXP by default allocates 1 gig for his temp internet files. Still doesn't add up unless his saved game is 12 gigs.
But surprisingly it DOES work, especially if you delete other things in your My Documents folder. Had the same problem when i first installed Live 2004, so i promptly killed Live 2003's saved games from My Documents and the problem went away.
Nice bug EA. Let's make it 3 years in a row with Live 2005.