Hmm, thats a technical question that has a technical answer, but here go
Basicly the computer trys to predict what your gonna need so when it does this is holds such things in the different levels of cache
I think thats the proper answer anyway, hopefully someone can tell me I'm right
The more Cache basicly the faster the computer handle things, thats why you see the P4 EE's with a total of 2.5mb of cache spread out amongest 3 levels and why Server CPU's have gargantuan caches aswell(though Intel does it mainly cause they are at a huge lose when you compare them Quad Xeon's to Quad Opteron's, but thats another subject ). The main downside to more Cache though is higher prices aswell
the price here (australia) are INTEL P4 3.2ghz 512 Cache $422 , INTEL P4 3.2ghz 1 meg cache $492 , INTEL P4 EXTREME 3.2ghz 2 meg cache $1319 and theres only $10 difference for the 2.8 Ghz to the prescott 2.8 Ghz.