I strongly doubt even that could consume 100 GB! While your friend may have computer knowledge, many of the folks you can find here are experts. And we’re telling you: No way.
While HorseloverFat is correct insofar as 100 full 1GB RAM dumps could theoretically consume that much disk space, DrWatson’s default is to create “mini-dumps” that would consume much less space per dump, and besides, the default for number of crash dumps to keep is 10, not 100, so you’d never approach 100 GB unless you deliberately altered the default settings (something I’ve never felt the need to do). You can easily examine the settings by selecting “Start -> Run…” then entering “drwtsn32.exe” (the quote marks aren’t needed). You’ll get a pop-up window that will show the log file path as well as the crash dump path. If it doesn’t/didn’t match the location of the 100 GB of “Dr. Watson” data you found, then you can eliminate Dr. Watson as a suspect, my dear Holmes.
You might want to change the “Number of Errors to Save” to, say, 3 (or even 1), and set the “Crash Dump Type” to “Mini”. It’s probably not a good idea to turn off crash dumps entirely, but you don’t need to keep more than one or a few (rather than 10).
Still, I’d wager that the “100 GB” size you encountered was more likely the result of accidental directory clobbering or other data corruption than any malware. In any case, you really NEED to install some good anti-malware tools immediately! You’re far, far better off buying commercial anti-malware tools, but you can find more-or-less acceptable freeware tools, such as Avira anti-virus or Malwarebytes Anti-Malware, or many others besides. I strongly advise against choosing Norton/Symantec or McAfee, though!
If you want more detailed help, you might want to consider posting your request on Windows XP Annoyances. Their message board software is unbelievably crude, but on the plus side, a great many knowledgeable users and helpers visit that forum…