About three years ago I purchased a Dell XPS 8100 computer with a 1000 gigabyte hard drive, Windows 7 Home Premium with an Intel Core i7 CPU. Until recently, this computer has performed wonderfully and I've always had approximately 850 gigabytes of free space.

A month ago, in one day, the free space decreased by about 90 gigabytes. Yesterday, in approximately 12 hours, it decreased by another 110 gigabytes. I've not downloaded anything out of the ordinary during this time, as I mainly use this computer for emailing and surfing. The Dell site checks indicate all hardware is okay (although at one point it said "Unexpected Error Occurred"), and checks by Microsoft Security Essentials, Malwarebytes, SpywareBlaster and Spybot indicate all is well.

I would definitely appreciate suggestions.

One reason can be installed softwares occupying space else it is weird

You might want to try using a disk space monitor to see if you can identify what is using up the space.
Five Best Hard Drive Space Analyzers
System Restore can use a lot of space but typically it is set to a certain allocated amount and you lose older points for new points when you reach the limit. Sometimes a program will create temp files while doing its function and then it should delete them after it finished. If something goes wrong with the program it may fail to delete its temp files and just start growing out of control.