The default working directory does not appear as a folder in ArcCatalog. This directory was set on the General tab of the Options dialog box on the Spatial Analyst toolbar. The only way the datasets in this folder can be managed (deleted/moved/copied and so on), is by navigating to this location in Workstation ArcInfo.
In ArcCatalog, if a folder or file has the system attribute set, it will not show up in the ArcCatalog tree.
attrib -s *.*
attrib -s temp
You can run Attrib with fully qualified paths:
attrib -s c:\winnt\temp