Windows temp directory details (Java) - Stack Overflow

1. In each user directory under AppData\Local\Temp\ This may change depending Windows version?
2. In the system folder under Temp\ (C:\Windows\Temp)

Not quite. There is a user and system folder, the default location of which varies according the windows version, system folder name, and indeed in older versions of windows was the same for both the user and system case. However, these defaults can be over-ridden (they are on the system I'm using now, where they aren't on the same drive as the system folder).
The locations are stored in system variables. Some frameworks (.NET, VB6 and no doubt others) give you convient ways to find the paths rather than having to look up the system variable (e.g. System.IO.Path.GetTempPath in .NET).
Windows does not clean up the temporary folder for you (which is why it's worth blasting out old files it every few months on your own machine), it's up to you to play nice. Create a file or files unlikely to step on the names any other software is using (they should take care to do the same, and so any name should do, but it's always good to assume the worse of other code on the system), and delete files when you're done (or on application exit at least).
In .NET System.IO.Path.GetTempFileName() will create a new file in the temp area and return the name of it to you, that is reasonably guaranteed not to conflict with others' so use that or similar methods if you can.

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