Well, I finally succumbed to the urge and created a partition just for temp files on my workstation. I have been mildly annoyed that I have not been able to defrag my disk completely. Defrag would complete but the next time I ran defrag, it would still recommend that I defrag my disk. I was not sure if the number of Temporary Internet files had anything to do with the problem but I thought I would give it a try. The process of moving my Temporary Internet Files over to the new partition took some time since there are over 18000 files. I ran the defrag but defrag did not completely defrag the disk. So I rebooted into safemode(command line) and ran the chkdsk and defrag. Chkdsk found something it did not like in the MFT but otherwise was okay. Defrag ran for what seemed forever. I wasn’t sure it was running so I bailed out. After booting normally I checked the disk and it was almost completely defragged. Finally!
After running a few days with swap space on a second drive I believe both the server and the workstation have been more responsive. I cannot say for sure but I think the periods 100% cpu utilization are shorter. I am guessing that I had a mild bottleneck accessing the swap space.