how to remove a folder with lock symbol in win7

This is very likely to be a folder left by a Windows Updates package, most likely a service pack. I would just leave it alone. If you really need to get rid of the folder and you can't find a Windows installation that would let you remove it, get a Linux LiveCD, mount your drive within, and remove the folder. As for the missing space on your hard drive, also try Linux and use GParted to do the formatting. Take care to avoid formatting the recovery partition on your computer.

If the same type of folder shows up the next time you install Windows updates, just leave it. IIRC it contained extracted files from the service pack setup, and could possibly be used to restore system files.

I believe the folder is owned by SYSTEM which is why you are seeing the lock. I'm also guessing @JasonBristol is right, that its a system operation, you normally see this when Microsoft is making updates to your machine, but I don't recall them being locked... do you have BitLocker (http://en.wikipedia.org/wiki/BitLocker_Drive_Encryption) turned on?

Anyhow, after you determine if you can delete the files, you should be able to change the permissions to the folder so you can delete them.

Some leads:

http://windows7themes.net/how-to-remove-lock-from-folder-in-windows-7.html

http://social.technet.microsoft.com/Forums/windows/en-US/16474fcf-688b-4eae-88f4-804306bafc0f/how-do-i-remove-padlock-icon-from-all-my-files