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When opening a temporary file, Powerpoint 2010 usually creates a temporary, hidden file called ~$filename.pptx in the same directory. This is undesirable, since it can cause unnecessary activity with e.g. Dropbox. Furthermore, the "Documents" folder should not be used for temporary files -- we have the %TEMP% folder for that.

So, is it possible to have Powerpoint create its temporary files in %TEMP% instead? The following link suggests that it might not be possible: http://support.microsoft.com/kb/211632

Also, why does Microsoft not use the %TEMP% folder?

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A more modern solution would be to use an alternate data stream. – Ben Jul 13 '11 at 10:34
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It isn't possible nor desired for several reasons. While having a temp file will cause unnecessary syncs, that isn't the concern.

As the articles say, this is mainly due to speed(especially larger files) and more importantly, data integrity. What if there was an interruption while Office was writing to your original file?? While easily recoverable, it isn't a gamble I would take as a developer.

I wouldn't worry about the unnecessary activity. I lorem ipsum about 30 pages on my dropbox just now and I hit 6KB/s of network activity for about 5 seconds. . .

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But why does Microsoft not use the %TEMP% folder instead? – Ben Jul 11 '11 at 11:43
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For situations similar to yours. If it was a document stored offline, WHOLE doc file into %temp%, creating unnecessary traffic. In the case of creating a temp file in the same directory as the working doc, the server has a chance to realize that it is a copy command and thus handle most of the changes server side. In the current model, the worst case scenario is a complete copy. In your suggestion, worst case scenario is they copy it from the network to the local temp, then back to the network. – surfasb Jul 11 '11 at 17:41
But the temporary file is not a copy of the original document. – Ben Jul 13 '11 at 10:33
Ben, you got a very good answer from @surfasb... why not just +1 him as you should? he actually answered you twice. – Etamar Laron Oct 22 '11 at 11:54
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