The (default at least with 95/98) directories, C:\Windows\Temp and C:\Windows\Temporary Internet Files serve different purposes.

As far as I know.

"Temp" is as MMario suggested.

"Temporary Internet Files". Is the chache for Internet Exporer and nothing more. It holds cookies and files such as gifs and html pages to allow them to be read without downloading again a) in an attempt to speed things up and b) to enable viewing pages while working off line.

Windows does use disk space for virtual memory in situations where the systems memory is insuffient but that at least used to be a file called c:\windows\win386.swp.