Replica exchange methods (REMs) are increasingly used to improve sampling in molecular dynamics (MD) simulations of biomolecular systems. However, despite having been shown to be very effective on model systems, the application of REM in complex systems such as for the simulation of protein and peptide folding in explicit solvent has not been objectively tested in detail. Here we present a comparison of conventional MD and temperature replica exchange MD (T-REMD) simulations of a beta-heptapeptide in explicit solvent. This system has previously been shown to undergo reversible folding on the time scales accessible to MD simulation and thus allows a direct one-to-one comparison of efficiency. The primary properties compared are the free energy of folding and the relative populations of different conformers as a function of temperature. It is found that to achieve a similar degree of precision T-REMD simulations starting from a random set of initial configurations were approximately an order of magnitude more computationally efficient than a single 800 ns conventional MD simulation for this system at the lowest temperature investigated (275 K). However, whereas it was found that T-REMD simulations are more than four times more efficient than multiple independent MD simulations at one temperature (300 K) the actual increase in conformation sampling was only twofold. The overall gain in efficiency using REMD resulted primarily from the ordering of different conformational states over temperature, as opposed to a large increase of conformational sampling. It is also shown that in this system exchanges are accepted primarily based on (random) fluctuations within the solvent and are not strongly correlated with the instantaneous peptide conformation raising questions in regard to the efficiency of T-REMD in larger systems.