If the client says that it only found 1 processor, then yes, it's only using 1 processor. As for the 1 instance in top, there doesn't have to be 2 in there for Dnet to be using 2 CPUs. The Mac OS X client, for example, uses both processors with one process. The Dnet client may very well be lieing though, it's
very odd to hear of a Sparc beating an Athlon. If you want to be sure of it, set the Dnet client to use 2 CPUs(Go into config with -config, then look in menu 3 I belive), and see if you get an average speed boost(1 CPU will still do it at the same speed, but the average will be twice as high, as 2 WUs will be completed instead of 1).
As for the Disk I/O thing, the client will save its buffers in the same directory as where the client is. If the client is on the network drive, then the buffers will be there, and vice versa. Either way, it's a good idea
not to store the buffers in memory; sooner or later you'll crash.