My Book out of space, multiple "default set" backups?

Hi.  First Time poster.  I have Norton 360, on an HP PC with Windows Vista.  I noticed that my automatic backups have been failing for about 6 months now.  I have a .75 TB external "My Book" (L:) drive that I have been using.

After poking around in N360 and with Windows Explorer I have made the following findings.  Under the "Norton Backup Drive" under "Computer" in Explorer I see 3 (three) different "folders" titled "DefaultSet on L:".  Under the "Manage Backup Sets", "Delete Backed Up Files" dialog in N360 I am able to select from 3 sets of files (all of name "DefaultSet") with the sizes of 1.) 2970 files / 10.0 GB, 2.) 1491 files / 26.1 GB or 3.) 8470 files / 16.5 GB

Similarly, under the L: drive I see 3 (three) encrypted folders under the "N360_Backup" folder.  The sizes of these folders are 411GB, 10GB, and 16.5GB.

I realize that the total of these files is less than the total capacity of my L: drive but I have copies of old hard-drives on there as well as other things that it appears I have just "copied" over from my C: drive such as iTunes music and the "Users" directory....ancillary question here - if I have selected Music and email and office files under the N360 backup won't these have been backed up by N360 as encrypted files in the N360_Backup folder?

Doing a "Preview" in N360 backup shows that I need 117GB to perform the backup now.  Does N360 Backup only back up the files that have been changed since the last backup or does it do a completely new backup of all of the file / folder types selected in the "set"? 

So, the issue is, can I free up some space on the L: drive by deleting some of the things I have on there such as the 10GB and 16.5 GB files in N360_Backup?  Also, should I delete the un-encrypted copies of iTunes Music and Users directories?  Or, do I have to get a new External Drive and keep this one as well (i.e. if it has "incremental" backups of things needed to complete any new backup)?  

Thanks in advance for the help