System Restore takes up more space as time goes by

What your seeing is space being taken up by both "Restore Points" and "Previous Versions" of files - both of which are stored in the same folder.

"Previous Version" file copies get made regularly by default in Win7.

Do you have automatic updates on?

Windows automatically creates restore points before updates are applied incase of failure (Which is good - Windows 7 is VERY good at recovering from failures).

After this, most installations now also create automatic restore points.

If this is a problem, you can look in Control Panel > System Properties (Windows Flag+Pause/Break), then click System protection on the left. Click the Configure button and you can manually control the space usage.