For what it's worth:
I installed two VelociRaptor 300GB 10k rpm internal drives (Raid 0) and use one for CS4 scratch disc and the other for files of images in production. This was after upgrading my ram from 2 to to 4Gb on a Core 2 Duo 32 bit PC machine. I've noticed quite an improvement in performance, and have had no problems processing 500GB 16 bit TIFF files through HDR, Photomerge, ACR tweaking, etc. When the images are finalized and ready for printing, I flatten layers and save on a Terrabit external Firewire drive for Qimage retrieval, with backup copies sent to a Terrabit MioNet remote server that doubles as a client dropbox for uploading images to me. This workflow allows me to processes a couple dozen images a week for my photographer and artist clients. The only time I had a "not enough RAM" error was when trying to use CS4 Content Aware Scaling, and after trying it on numerous images, didn't really care for the artifacts it created and don't use it anyway.