If you only have one hard drive and you are using that as your sratch disk then it is on the same hard drive as the Windows paging file it can create a conflict. Adobe has listed some solutions see the link, http://www.adobe.com/support/techdocs/316693.html or read them below:
Solution 1
Make sure that the image has an appropriate resolution setting:
1. Determine the resolution required by the destination device (e.g., monitor, printer). For more information, see "About image size and resolution" on pages 92-95 of the Adobe Photoshop 6.0 User Guide or pages 54-57 of the Adobe Photoshop 7.0 User Guide.
Note: The Resolution setting in the Image Size or New dialog box is in pixels per inch (ppi), not dots per inch (dpi). Don't use the maximum dpi of your printer for the ppi of your image. Even a high-end imagesetter that can print at 1200 dpi or higher requires only between 200 and 300 ppi, not 600 ppi.
2. Choose Image > Image Size.
3. Change the Resolution setting to an appropriate ppi for the destination device, and click OK.
Note: If you later increase the resolution, the image may appear blurry or out of focus. For more information, see "About Resampling" on page 96 of the Adobe Photoshop 6.0 User Guide or pages 57-58 of the Adobe Photoshop 7.0 User Guide, or search for "resampling" in the online help. To avoid deterioration in image quality, always resample in a copy of the original image.
4. Choose File > Save As, and save the image with a new filename.
5. Close and reopen the new image.
Solution 2
Specify one or more hard drive partitions that have enough free space--approximately three to five times the file size of the largest image and at least ten times the size of the largest bitmap-mode image--as scratch disks. Don't specify a network drive or removable media such as a Zip or JAZ drive. Photoshop 6.x can create 200 GB of scratch disk files on up to four hard disk partitions; Photoshop 7.0 can create an unlimited number of scratch disk files, limited only by hard disk space.
To set the Scratch Disk preference:
1. Choose Edit > Preferences > Plug-Ins & Scratch Disks.
2. Choose the drive that has the most free space from the First pop-up menu.
3. Choose a second, third, or fourth drive, if available, from the Second, Third, or Fourth pop-up menus.
4. Click OK.
5. Restart Photoshop.
Solution 3
Optimize and defragment hard disks:
-- In Windows XP or 2000, use the Disk Cleanup and Disk Defragmenter utilities by choosing Start > Programs > Accessories > System Tools.
-- In Windows Me or 98, use the ScanDisk and Disk Defragmenting utilities by choosing Start > Programs > Accessories > System Tools.
-- In Windows NT 4.0, scan hard disks for errors by typing CHKDSK/f at the Command Prompt. Then, defragment hard disks by using a Windows NT 4.0-compatible third-party utility.
Solution 4
Increase the amount of virtual memory available to Windows. For instructions, see Additional Information.
Solution 5
Adjust the percentage of memory used by Photoshop:
1. Choose File > Preferences > Memory & Image Cache.
2. In the Physical Memory Usage section, change the Used By Photoshop setting to 75%, and then click OK.
3. Restart Photoshop.
Solution 6
Re-create Photoshop's general preferences file by exiting from Photoshop, renaming the file (e.g., to Filename.old), and then restarting Photoshop:
Note: If you delete the general preferences file instead of renaming it, custom preferences settings will be lost. For more information, see document 312917 , "Photoshop and ImageReady Preferences Files."
First, if Windows doesn't show filename extensions, enable it to do so:
1. In Windows Explorer, choose View > Options (Windows NT), Tools > Folder Options (Windows XP or 2000), or View > Folder Options (Windows Me or 98), and then click the View tab.
2. Select Show All Files in the Hidden Files section or folder, deselect the option labeled "Hide File Extensions for Known Files" (Windows 98 or ** NT 4.0) or "Hide File Extensions for Known File Types (Windows XP, 2000, or Me), and then click OK.
Then, rename the appropriate file:
Mac OS
-- In Photoshop 7.0, the Adobe Photoshop 7.0 Prefs file is in the Users: [user profile]: Library: Preferences: Adobe Photoshop 7.0 Settings folder (OS X) or in the System Folder: Preferences: Adobe Photoshop 7.0 Settings folder (OS 9.x).
-- In Photoshop 6.x, the Adobe Photoshop 6.0 Prefs file is in the System Folder: Preferences: Adobe Photoshop 6.0 Settings folder.
Windows
-- In Photoshop 7.0, the Adobe Photoshop Prefs.psp file is in the following folders:
Windows XP and 2000:
Documents and Settings/[user profile]/Application Data/Adobe/Photoshop/7.0/Adobe Photoshop 7.0 Settings
Windows Me and 98:
Windows/Application Data/Adobe/Photoshop/7.0/Adobe Photoshop 7.0 Settings
Windows NT:
WinNT/profiles/[user profile]/Application Data/Adobe/Photoshop/7.0/Adobe Photoshop 7.0 Settings
-- In Photoshop 6.x, the Adobe Photoshop 6.0 Prefs.psp file is in the following folders:
Windows XP and 2000:
Documents and Settings/[user profile]/Application Data/Adobe/Photoshop/6.0/Adobe Photoshop 6 Settings
Windows Me and 98:
Windows/Application Data/Adobe/Photoshop/6.0/Adobe Photoshop 6 Settings
Windows NT:
WinNT/profiles/[user profile]/Application Data/Adobe/Photoshop/6.0/Adobe Photoshop 6 Settings
Additional Information
Photoshop uses a scratch disk (i.e., temporary disk space used for storing data and performing computations) when there is insufficient RAM for image editing. When there is insufficient RAM and scratch disk space to perform image editing operations, Photoshop returns the error "Scratch disk is full."
A common cause of insufficient RAM is unnecessarily large files. The higher an image's resolution, the larger the file. The larger the file, the more memory Photoshop requires, and the more likely Photoshop's scratch disks will become full.
Photoshop uses the virtual memory swap file to swap parts of the application in and out of memory, but it doesn't use virtual memory for image editing operations. When virtual memory is insufficient, Windows retains large portions of Photoshop in RAM, which reduces the amount of RAM available for image editing. Increasing virtual memory frees up RAM for image editing. When Photoshop's Physical Memory Usage is set to 100%, there may not be enough RAM available to Windows to perform some operations (e.g., printing, scanning). For some image editing operations, Photoshop requires a considerable amount of available RAM and scratch disk space. To check memory use in Photoshop, open the Efficiency Indicator: Click the triangle at the bottom of the application window, and choose Efficiency from the pop-up menu. Photoshop displays the percentage of time it is using to perform an operation rather than reading or writing to the scratch disk. If the value is below 100%, Photoshop is using the scratch disk.
A lost cluster, or file allocation unit, is a file fragment that is no longer associated with the original file. When you save a file to disk, the file isn't always written contiguously to the hard disk. The FAT (File Allocation Table) links the end of one file fragment with the beginning of the next one. When the FAT loses file fragment links, the result is a lost cluster. The Scandisk utility and CHKDSK command repair or remove lost clusters, while defragmenting rearranges the files and free space on your computer so files are stored in contiguous units and free space is consolidated in one contiguous block.
The Photoshop preferences file stores location and content information about Photoshop settings. Photoshop creates a preferences file during startup. When the information contained in the preferences file is damaged, Photoshop may return the error, "Scratch disk is full." Deleting the preferences file and restarting Photoshop forces Photoshop to create a new preferences file that contains default preferences settings and updated plug-in folder and file information.
To increase the amount of virtual memory available to Windows:
-- For Windows XP:
Note: You must be logged in as Administrator to change the size of the paging file.
1. Exit from open applications.
2. Choose Start > Settings > Control Panel.
3. Double-click System.
4. Click the Advanced tab, and then click Settings in the Performance section.
5. Click the Advanced tab, and then click Change in the Virtual Memory section.
6. From the Drive list, select a hard drive that has at least twice the amount of the computer's installed RAM. To determine the amount of space available on a drive, click the drive letter; the amount of space available appears in the Paging File Size for Selected Drive section.
7. In the Initial Size text box, enter a value equal to the amount of the computer's installed RAM plus 12 MB.
8. In the Maximum Size text box, enter a value equal to twice the amount of the computer's installed RAM.
9. Click Set, and then click OK to close the Virtual Memory dialog box.
10. Click OK when Windows returns the alert "The changes you have made require you to restart your computer . . . ."
11. Click OK to close the Performance Options dialog box, and then click OK to close the System Properties dialog box.
12. Click Yes in the System Settings Change dialog box. Windows restarts.
-- For Windows 2000:
Note: You must be logged in as Administrator to change the size of the paging file.
1. Exit from open applications.
2. Choose > Start > Settings > Control Panel.
3. Double-click System, click the Advanced tab, and then click Performance Options.
4. Click Change in the Virtual Memory section.
5. From the Drive list, select a hard drive that has at least twice the amount of the computer's installed RAM. (To determine the amount of space available on a drive, click the drive letter; the amount of space available appears in the Paging File Size for Selected Drive section.)
6. In the Initial Size text box, enter a value equal to the amount of the computer's installed RAM plus 12 MB.
7. In the Maximum Size text field, enter a value equal to twice the amount of the computer's installed RAM.
8. Click Set, and then click OK to close the Virtual Memory dialog box.
9. Click OK to close the Performance Options dialog box, and the System Properties dialog box.
10. Click Yes in the System Settings Change dialog box to restart Windows.
-- For Windows Me or Windows 98:
1. Exit from open applications.
2. Make sure a startup disk is available before you continue. After you change system settings, such as Virtual Memory, Windows may be unable to start, so you may need a startup disk to start Windows. For instructions to create a startup disk, see the documentation for Windows.
3. Choose Start > Settings > Control Panel.
4. Double-click System.
Note: If the System Control Panel doesn't appear in Windows Me, click View All Control Panel Options in the Control Panel window.
5. Click the Performance tab, and then click Virtual Memory.
6. Select the Let Me Specify My Own Virtual Memory Settings option, and then click OK.
7. From the Hard Disk pop-up menu, choose a hard disk that has at least twice the amount of the computer's installed RAM. For example, if the computer has 24 MB of RAM, choose a hard disk that has at least 48 MB of free hard disk space.
8. In both the Minimum and Maximum boxes, enter a value equal to twice the amount of the computer's installed RAM.
9. Click OK to close the Virtual Memory dialog box. The Confirm Virtual Memory Setting dialog box displays the message "You have chosen not to let Windows manage virtual memory automatically. . . ."
10. If you have a startup disk, click Yes to close the Confirm Virtual Memory Settings dialog box.
11. Click Okay to close the System Properties dialog box.
12. To restart Windows, click Yes in the System Settings Change dialog box. If Windows doesn't restart, insert the startup disk, and restart Windows.
-- For Windows NT 4.0:
1. Exit from open applications.
2. Right-click My Computer, and choose Properties from the pop-up menu.
3. Click the Performance tab, and then click Change.
5. From the Drive list, select a hard disk that has at least twice the amount of the computer's installed RAM. For example, if the computer has 24 MB of RAM, select a hard disk that has at least 48 MB of free hard disk space.
7. In the Initial Size box in the Paging File Size for Selected Drive section, enter a value equal to the amount of the computer's installed RAM plus 12 MB.
8. In the Maximum Size box, enter a value equal to twice the amount of the computer's installed RAM.
9. Click Set, and then click OK.
10. Click OK to close the System Properties dialog box.
11. To restart Windows, click Yes in the System Settings Change dialog box.