SunilA has a great set of posts out on the SQL Server Storage Engine blog about managing TEMPDB.  It's one of those issues that never seems to go away, so I always encourage folks to read the best practices out there and try to apply them to their environments.  However, it always helps to start with the basics so we can understand the "WHY" rather than just the "WHAT".  Anway, check them out:

http://blogs.msdn.com/sqlserverstorageengine/archive/2008/12/21/tempdb-basics.aspx
http://blogs.msdn.com/sqlserverstorageengine/archive/2008/12/22/tempdb-basics-cont.aspx
http://blogs.msdn.com/sqlserverstorageengine/archive/2008/12/31/managing-tempdb-in-sql-server-tempdb-basics-version-store-simple-example.aspx