I don't know what would happen if you deleted the whole fonts folder.
I hardly ever touch that folder. The default fonts work just fine for me and the existing one don't take that much space so I see no reason to remove them.
I would imagine that something really bad would happen like no text being displayed at all due to lack of a font available.
If you want to try it I would recommend using a Virtual Machine program like VirtualBox as then your main copy of Windows is still working.
Edit: I just tried it with Windows Vista in VirtualBox.
It wouldn't let me remove the fonts folder.
Many of the fonts are owned by TrustedInstaller so they can't be removed.
Some fonts was locked by a process and couldn't be deleted either.
Edit 2: Just tried to take ownership to see what would happen. I could then remove most of fonts except for 24 fonts that were locked.
Also it appears at this point none all the links on the HTG Forum are displayed due to lack of available fonts and many web sites don't work at all.
Edit 3: With the help of the program Unlocker I was able to delete the remaining fonts. Windows ok so far as I think the fonts are cached.
Edit 4: Rebooted and now can't even load Windows Vista.
Get error "Windows failed to load because the NLS data is missing, or corrupt."
Edit 5: Now I reverted to a Snapshot in VirtualBox and my virtual Windows Vista install is back to normal.
So in short: You have to really try to remove the fonts folder and if you do then you need to recover your Windows install.