BUG #13672: What is the purpose of the temp_buffers setting?

The following bug has been logged on the website:

Bug reference:      13672
Logged by:          Jamie K
Email address:      jkoceniak@mediamath.com
PostgreSQL version: 9.1.14
Operating system:   Debian GNU/Linux 7 (wheezy)
Description:

I set temp_buffers to a high value (8GB). My understanding was that
temporary tables stay in memory if they do not go over temp_buffers limit.

However, I noticed that any temporary tables that I create are written to
disk. (i.e. I see t181_869525834 filenames in the data directory)

Also, I don't see any query performance improvements when querying temporary
tables using a higher temp_buffers value.

What is the purpose of this setting and what performance improvements would
you expect to see by adjusting the temp_buffers value?