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This is how Photoshop describes what it calls a 'scratch disk':
"When your system does not have enough RAM to perform an operation, Photoshop and ImageReady use a proprietary virtual memory technology, also called scratch disks. A scratch disk is any drive or a partition of a drive with free memory. By default, Photoshop and ImageReady use the hard drive that the operating system is installed on as its primary scratch disk.
You can change the primary scratch disk and, in Photoshop, designate a second, third, or fourth scratch disk to be used when the primary disk is full. Your primary scratch disk should be your fastest hard disk, and should have plenty of defragmented space available."
So if you only have one hard disk and it's full, you'll either have to give it a good and thorough clearout or buy a second hard disk. Even then you'll still need to give your existing disk a good clearout because very soon Windows itself will start complaining about it and performance will suffer.
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