The Temp folder is used as a holding pen for each module and is used currently to store images if the Storage folder is lost of moved on the server (used in the add_process.aspx page). It can also be used to store the following:

-Lost images or thumbnails who have be given a bad storage path, or have been corrupted or lost
-Logs of errors generated by the system or module
-Corrupted or lost database xml files
-Misc. error data generated by the system
-Bad files moved by the system or user for some reason

Use this folder to store your own custom errors generated by the module or locate existing errors here.