Well you can always just reinstall it to a different drive.
To keep the database at a smaller size then either modify the job not to save the detailed information in the database or reduce the number of days for the DB Prunning Job.
The use the utilities to free up the disk space. There is a readme in the ARCserve directory and also see faq478-4386.
quick way - initilize via ARCserve Server Admin, Database, operation, initilize.