Let's see if I remember this correctly...
Cache's are memory (RAM) that can be directly accessed by the processor without the need for going through the computer's memory bus or OS, thus the processor has faster access to it. The cache is used as a temporary storage place for (sometimes) the next anticipated data from a file. I seem to recall that processors can also store the temporary results of a series of calculations in the cache - but maybe I'm confusing that with something else? At any rate, the larger the cache, the more temporary data that can be stored and accessed directly by the processor, thus it speeds up the system a bit.