Dan--I'm afraid I can't answer your question directly (I could tell you about scratch disk size in relation to your page file size...but that wasn't your question! ;-))...but I can point you towards this article, which might give you some more insight into the question...as well as point out a few tweaks you can make to get
PS running more quickly. (The article is for CS2, but I've used most of them for CS, just fine...)
http://www.adobe.com/support/techdocs/332271.html
Two things that do occur to me right away are: a) that it sounds like your scratch disk is on the same drive as Photoshop (performance can REALLY improve if you give
PS it's own separate hard drive for it's scratch disk...or, barring that, you'll even see some performance increase by having it on the same hard drive--but on a separate partition...and b) you didn't mention when was the last time you defragged. (If you haven't in a while--you should. Try downloading a trial version of Diskeeper, and run it--it's much more efficient than Windows' own tool for the job. You might find this to be a significant help to you.
Oh--and also, how much free space do you have on your hard drive (160gb is pretty small these days, if you leave your
PS images on the hard drive!)? Do you actually have sufficient room for your page file (which, hopefully, you have set to the same minimum and maximum, so your system isn't constantly resizing it) AND your scratch disk space? (Again--these are related to speed and performance, rather than size, so they're sort of tangenital to your question...but they're good things to think about, if you're not, already!

And the article I pointed you towards DOES address the sorts of changes you can make to your file that cause extra resource drain...)
Good luck with this--and hopefully someone else will chime in, with more info for you--