With a 128MB SSD you should be able to optimise the speed gains with the following workflow -
First, as others have said, make sure the Lightroom Catalog and the CR Cache on the SSD. The catalog can grow very large if you have a lot of 1:1 Previews. I make sure they're set to delete after 30 days (you can alway re-create them).
It does speed up processing if the raw files are also on the CD. But, as suggested above, you dan't want them wasting SSD space. The trick is to only have them on the SSD while they're being worked on.
So, I import from the card onto the SSD - into a folder called 'Working Images'. During import I tell LR to create 1:1 Previews (slows down the import, greatly speeds processing). Then I cull the dud images (in Loupe view, with 'Caps Lock' on; Press X to flag for deletion, P to mark for processing, U (or right arrow) to leave unflagged - then press CTRL-Backspace to delete all those so flagged). FInally, everything is processed.
Once processing has finished I move the images onto the HDD. The important thing here is to to the moving from within Lightroom's Library module. That way LR can keep track of where all the images are.
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