I am getting the common error of 'Scratch Disks Full', so I have looked in the temp folder and there is a Photoshop Temp file that is worth 1.6 Gigabytes. I have tried to delete it and am being told that I cannot delete the file because photoshop is open. Whenever I close photoshop, the file dissapears, and then appears again when I open photoshop.
Not sure what you are asking. This is just how it works and if you are struggling with a 1.6 GB file, which really is pretty much the minimum PS will always use, then you seriously need a bigger disk. Other than that you may want to check your scratch disk configuration in the preferences. If you provide some better info about your system and the aforementioned configuration I'm sure we can advise on how to configure it suitably.
Photoshop will always create a scratch file, and as Mylenium says, 1.6 GB is the minimum. That's the starter size, growing from there. It may grow to several hundred GB in one session if you work on reasonably sized files.
Raster image editing moves large amounts of data around, much more than any RAM you may have installed. All that data has to go somewhere. That's the scratch disk.
In other words, your system drive ireally is full, and you need to do something ASAP. Pretty soon you will have much bigger problems than Photoshop. Your whole machine can freeze up at any moment. 1.6 GB is nothing, I have single files bigger than that.