It all depends on your disk setup. Common wisdom is to spread disk access over as many disks as you have. That will simply mean less disk activity over all and less performance degradation. There is no clear cut answer because your disk setup will likely differ from mine. Have a look at these articles, maybe it will help you.
Also notice how fill rates will influence your overall performance:
There is no degradation whatsoever on this array, it stays at high levels. Take notice that HD Tune incorrectly identifies the array size as 2199 GB, while it should be 10000 GB (10 TB). Now consider a single disk and see what happens:
This is using the same disk type, just a different setup.
These kind of differences will influence your decision on where to locate your media cache.
I found that there is an advantage.
Let's say you had this scratch disk set up on the root of the D: drive. Previous versions of Premiere would create a folder for each new project - Smith, Jones, etc. - and save the actual files in those folders. This made organization very easy. For some boneheaded reason, CS4 no longer creates a folder for each project. It saves the files directly to the specified location. Which means all cache files will be in the same place unless you change this setting for every project, every time you open that project. It gets worse if you have the same file name for different projects. Say you start with Smith, and have files named "File_01", "File_02", etc.. Then you create project Jones, which also has "File_01", "File_02", etc. The Jones media cache files will overwrite the Smith files because they're idiotically in the same place, rather than in separate Smith and Jones folders.
So you either change the scratch disk setting every time you open a project, or check off that little box so they get saved in the same folder as the media, which is just much easier to manage.