Well, to some this might be the obvious answer, but actually there is more to caching, than the browser cache. There is more that you can do, as a web developer!
Why is caching important? Because on sites with a wide array of content and many users you will want to deliver information as fast as possible and reuse information that has been accessed or searched for already by other users. Cache file for search query results or other dynamic information can be stored on the sites space and be accessed alot faster than by query or parsing through script languages. Reading a file is still the fastest method around to retrieve information.
There are quite a few ways to implement caching and now there is an interesting option i have found that uses some Apache modules and let the webserver handle caching. Read more about how to use those modules as askapache.com.