The /C switch is to compare entries. It scans the HD for anything associated with the registry entry. If nothing is found, it removes the entry, then writes the reg.
The idea of copying the files to root c is to compare them later to see how much difference there is. It's just a recommended step, not really necessary, as the registry export function literally does the same thing.
As far as I know it will work on all Win9x versions, but I haven't tried it with Win95a.
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