before XP is was a little different ... but now
Personally - I'd never use one
Unless you loaded 20 progs a day (and never uninstalled them) ... you'd find it difficult to choke the registry - (flatfile databases (that's what the registry is) are designed to work efficiently with many Gbs of information)
What is worse for your system is leaving lots of DLLs etc in window's system folders.
so if you must, run the cleaner ... (windows' disc cleanup is probably all you need) ...
Reg Mechanic as you say has been round for years ...
So I suppose at best ... it will do less damage than some others!
(norton used to include similar - but seem to have dropped them lately.)
See what Microsoft say
http://windowsxp.mvps.org/registry.htm
XP backs up the registry every time you startup
if things go wrong ... goto help and support ... restore the system to before .....
if you try out lots of proggys ... you should consider re-installing your O/s every 12-18 months ....
build your system ...
I use at minimum C: & D: - d: is where my "My documents" lives
don't install too much software ... only drivers - get everything just as you like it
Then use an application like Acronis true image to create an image of your working system (c: only) - XP fits on 2-3 CDs - Vista on 2-3 DVDs!!!. This is your base
(this is how I do it ....)
then load everything you must have - and take another image - if you break your system ... use this to get up and running.
If I make a mess (which I do often) ... it takes about 15 mins to get back up and running.
as new hardware or proggys are added or upgraded .... your "working" system will get out of date ....
so from time to time ...