For Win 7 users the default location should be C:\Users\<username>\AppData\Local\Temp
IMHO checking and clearing out this folder should be part of the normal system maintenance for all ACad users. Mine has not been giving me any problems but I still had 532 files and 678MB of junk to get rid of.
Our solution -> call Bentley.
In my experience, that software crashes at least as much. And given that I've used AutoCAD for a lot longer, I find Microstation very frustrating. It often takes me a couple of hours to do a task that I can do in C3D in a few seconds. Although I've heard that people who start with the MicroStation products have the similar problems when they try to use C3D.
C3D 2010 did tend to crash a lot. Not as much as earlier releases, but it wasn't all that stable. C3D 2011 also has lots of problems that were fixed in C3D 2012. C3D 2013 has introduced a bunch of new nightmares. So far, I recommend moving to C3D 2012... It rarely crashes on me, and doesn't have all the "surprises" of C3D 2013. After C3D 2013 SP1 is released, then that might change, but I find C3D 2012 to be the most productive at the moment.