Hi Rushikesh, sorry we haven't seen that before - so I don't know what the cause could be (perhaps anti-virus software scanning the file?).
That file is created in .NET's Isolated Storage, it's purpose is to store the user's options as set from the "Options..." button which is available in the dialog spell checker (as created by the RapidSpellDialog control).
Yes, you can disable it as you asked, and you should do the same in RapidSpellDialog if you're using that. If your users are not changing the default settings, then it won't have any effect on their experience if it is disabled. I believe it will also solve your problem.
An alternative that might work for you is to specify that the path is relative to your EXE instead of in IsolatedStorage (this won't work if your EXE is somewhere where only admin can write): do this with the OptionsStorageLocation and OptionsFileName properties.
There's more in the help section on user options.
Best
Jim
-your feedback is helpful to other users, thank you!