Clear up space on Windows 2008 Server

if you install the desktop experience features then you can "clean" your c drive using the right click on c drive then click clean drive.  this will delete things like tmp files, bak files, cache files, etc.  that is the best way I can think of to get rid of cruft

is that free and safe to use?  Is it built-in?

Correction, its 2011 Server

Go to add roles and features then under feature turn on desktop experience. It is free and built in.
https://blogs.technet.microsoft.com/danstolts/2014/05/how-to-enable-snipping-tool-windows-media-player-and-more-desktop-experience-tools-on-windows-server-2008-2012-r2/

Will still work on whatever version of server you are running

Is this by chance an SBS server?

WinDirStat seems to look good.  It is showing me that 40GB are located in this folder

C:\Windows\SoftwareDistribution\Download

What is this folder location used for?

I haven't tried this but...

https://answers.microsoft.com/en-us/windows/forum/windows_xp-files/is-it-safe-to-delete-files-under/8d98d924-b0b1-4f2b-bb4b-13f38126c588

"There are mixed views across the board about deleting this folder, but my view is that if you stop automatic updates, delete the folder then restart automatic updates that works and has worked many time before for me."

That folder keeps things like cache for autocad or temp install files.  Sometimes a running program will put run files in there that it uses during its normal operation so be careful.  Most big apps like autocad have a cleaning process built in but using the clean disk I mentioned earlier is a good way to get rid of stuff safely.
You may want to look at purchasing a bigger disk and cloning the drive.

Is this SBS server?  If so, are you running Exchange?

SBS

Have you checked how much space your Exchange database and log files are consuming?

I'm not running exchange

Is this an sbs server?   If so are you running wsus?