This setting is used for defining the default directory for the temporary files while rebuilding of view indexes.
When view rebuilding is done,it looks for temp dir in the workstation and creates the temp file for rebuilding.If temp dir is not available or doesn't have enough disk space then the temp files will be created in DominoData dir in the server.This will occupy server space temporarily and thereby taking longer time to rebuild the index.
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The size of the temp folder will be the equal to twice the size of the largest view or will be equal to twice the size of all the documents whichever is greater.
Choose a dir in the server with more diskspace for rebuilding of views.
Hence the temp files will be created in D:\lotus\Rebuild_view in the domino server.
This is very useful when Transaction logging is enabled in the server.