blossom1:can I just empty it as i go along assuming it will make new ones when and if I require?
Yes you can as this will remove gigs of unnecessary space but, I would recommend doing this periodically and, oldest - first otherwise you will lose your settings created in the document for your later projects. Initially, it doesn't matter where your folder is but ideally, your preview cache files should be placed in the Applications > QuarkXPress > Preferences > Preview Cache folder and pointed to this in the QXP Preferences.