I am running Tomcat bundled with Liferay5.2.3 and use Eclipse 3.5 (Galileo) as my IDE. I set up my Tomcat server in Eclipse as per this blog entry: http://www.jroller.com/h
When you start Tomcat with catalina.sh (or catalina.bat), the temp directory is set with the CATALINA_TMPDIR variable:
if [ -z "$CATALINA_TMPDIR" ] ; then
# Define the java.io.tmpdir to use for Catalina
CATALINA_TMPDIR="$CATALINA_BASE"/temp
fi
Also you can pass below as VM argument while starting Tomcat in Eclipse to use it as temp directory.
-Djava.io.tmpdir="C:\Program Files\liferay-portal-5.2.3-tomcat-6.0\tomcat-6.0.18\temp"