[From MySQL Developer Zone]
All robust relational database management systems utilize memory caching to help improve the overall responsiveness of their underlying engine. While certainly not free, accessing application data, query plans, or database metadata in RAM is normally much quicker than repetitively retrieving that same information from disk or building it from scratch. This paper compares the memory caching strategies used by a number of database vendors with MySQL, and then focuses on the MySQL query cache with a discussion of why its unique approach to memory caching can pay handsome performance dividends when correctly used by database administrators and performance analysts.
The article continues at
http://dev.mysql.com/tech-resources/articles/mysql-query-cache.html