Can I give an emulator more disk space?

The compilation of my Compact Framework app (.NET 3.5, VS 2008) failed with this error:

Deployment and/or registration failed with error: 0x8973190e. Error writing file '%csidl_program_files%\hhs\system.data.dll'. Error 0x80070070: There is not enough space on the disk.

Selecting Tools > Device Emulator Manager shows me nothing promising; nor does Project > Properties > Devices.

UPDATE

Vasiliy, is this what you meant? I:

0) Created a folder on my C drive named "VirtualStorageCardForNewHHSCFVS2008"

1) In Project > Properties > Devices > Output file folder, I changed the settings from this:

...to this:

...but now I get different err msgs. If I simply shut down the emulator as soon as it pops up, I get, "The RPC server is unavailable"

Thereafter, on attempting to run it, I get, "Deployment and/or registration failed with error: 0x8973190e. Error writing file '\Windows\NETCFv35.ppc.armv4.cab'. Error 0x80070070: There is not enough space on the disk. Device Connectivity Component"

UPDATE 2

I don't see a "Compress" option in my Project Properties; in fact, the whole collection of members are radically different:

You can use StorageCard to deploy you application. The storage card on emulator is any folder on the host machine.

To select the StorageCard directory go to Emulator properties.