I've just encountered a new problem in Photoshop7...something about a scratch disk and performance of the program.  I started getting a message a couple of days ago when I open PS.  Something about scratch disk being on the same drive as windows and that I should move it to another drive if possible so the performance wouldn't be compromised.  So I moved it to the D drive and PS is soooooo slow for me now.  I moved it back to where it was, but still the program is slow moving.  I've never even heard of a scratch disk until this came up.  Why is this happening and can I fix the problem?  I think it started around the time I had a particularly big render in Poser and the message came up in Poser that Window's was doing something with the virtual memory.  Could this have caused it and again, can I fix it?  Any help would be appreciated.

Your scratch disk is where Photoshop gets its memory and space resources to process whatever you're doing in Photoshop. I think by default it uses your hard drive, and it's usually a set number, so if there's not a whole lot of room on your drive, or if the set number is too small for the work you're doing, there's not a whole lot of space in which Photoshop can work. Some people manually set their scratch disk to be a much larger number or to be on another drive entirely. They may even partition their hard drive space and designate one of the volumes just for Photoshop's scratch disk.

It's been ages since I've had to fiddle with my scratch disk settings, so I don't know what the optimal setting would be, but if you increase the numbers or make more room on your hard drive, you should be okay.

Well I can give it a try but I really think it was Windows messing with the virtual settings.  Where would I go to increase the numbers for PS?

I'm probably not the one to ask. The last time I fiddled with my Photoshop scratch disks was on a Mac (pre OSX) at work. I did it from both within Photoshop and via the Info feature on Mac, where I increased the memory allotment.
I have no idea how to do that on Windows.

Anyone out there who can help?

Thanks for the input anyway April.  It's amazing what you learn and encounter even after working with a program for years!

Your scratch disc space (empty space on the hard drive) should be 3 to 4 times the amount of actual memory you have in the computer. I suggest more. I like to keep 10 to 20 gigs free for scratch disk space since Max also uses virtual memory. Photoshop uses a HUGE amount of space for virtual memory. It has to keep track of not only the graphics you're working with, but the entire history of that graphic.

If you have a slow hard drive, Photoshop is going to be slow. One thing you might try to speed it up is to defrag your hard drive. This will give you large blocks of empty space for the scratch disc instead of it having to maze it's way all around the little split up blocks of data.

   In Photoshop, you set your scratch drives in Edit>Preferences> Plug-in and Scratch discs... I have never seen any setting for controlling the size... However, there is a setting for how much, (percentage), RAM it will "appropriate" to run. 
  The reason Photoshop doesn't like running it's cache on your startup "C" drive, is that the size is completely variable, and depends on what you are doing... how often you purge, how "big" the files are that you have open, and so-on...
  I have found that it's much more practical to preset windows to it's maximum cache size, on two partitions, with the minimum set to the same size, or slightly less, then set at least two partitions of around six Gig, for "exclusive" use by Photoshop.
  Partition Magic is very useful for all this.... Meantime... the default setting for RAM usage by Photoshop is 50%.... which is good, but if you have two, or three GIG available, you can tweak it up to a lot more.... Windows does not require much more than 300 MB of RAM to run, but that can go up, depending on what you have running in the background..... simply tweaking the RAM used for Photoshop, (This doesn't take effect until you restart Photoshop), will give it's speed quite a boost.
Lou.

How do you purge?  Maybe that's what I should do if I knew how. 

Another thing that is often overlooked... is keeping the drive defragmented.  If you do a lot of moving files, can create gaps that photoshop uses... and can run out  of space on if working on a large file.  May have considerable free total space on the drive, but in sections not of sufficent size to work...

Thank you all for the input.  I've tried these suggestions and nothing seems to be working.  I'm still thinking that it must be that windows started messing with the virtual memory they took away from PS and gave to another app.  How can I assign more virtual memory to PS?

  to change what Windows is doing: go to Start> Control Panel>System... Select the "Advanced" tab, then select the "Settings" button in the "Performance" area...  select the "Advanced" tab... you have three very important settings here... My settings are usually... processor scheduling = Programs... Memory usage = Programs, and the one you're looking for "Virtual Memory"... Click the "Change" button. 
  You have three options for each partition listed, and they must be set separately... your choices are: Custom size, System managed size, and No Paging file...... I STRONGLY warn you that "No Page File" is a very bad idea I have three partitions...(This is for an example),  If you click "Custom Size" you will be asked to specify the size in Megabytes... I am set at 2000 for initial size, and 4000 for maximum size.... do not enter it as 2,000 or 4,000... next you click the "Set" Button..... If you have more than one partition, then I'd recommend setting a hard and fast pagefile for each..... Windows will, at some point, "suggest" that you let Windows manage your pagefile system.... working with graphics.... that's a bad idea. Hope this helps. Lou.
  Note This will not directly change PS's cache sizes, but it will prevent Windows from "moving in" on Photoshop's space. Lou