I have local temp tables and they generally have only two to three columns, can these be indexed?
Yes, for instance with this:
CREATE TABLE #Users
(
ID INT IDENTITY(1,1),
UserID INT,
UserName VARCHAR(50)
)
CREATE CLUSTERED INDEX IDX_C_Users_UserID ON #Users(UserID)
CREATE INDEX IDX_Users_UserName ON #Users(UserName)
ref: http://sqlserverplanet.com/tsql/create-index-on-temp-table