Cache is expensive, small, fast memory. You have several layers of memory...
Smallest is registers. They're very small and dont hold a lot but the fastest thing the processor has to rely on. Generally measured in bytes.
Next is the cache. A little bigger, not quite as fast as the register; however, it's bigger and slightly cheaper to come across. Oh, and it's generally measured in kb.
Next level is your RAM. Getting pretty cheap these days and you can find some pretty quick, but not nearly as fast as cache. Measured in MB.
Lastly is your HDD. Duh.
The industry pretty much has the HDDs and RAM covered... Speed is there as well as space. Cache, smaller and more expensive to make, it's coming around.
I would say what you're doing, or your wife, that computer has plenty. Hell, if you're like me and dont game at all I would suggest a mobo with onboard video and save some $$.
That 250GB HDD... Do you really need all that space? I download... ahem... Buy tons of music and put it onto my external HDD and I'm only using about 8GB. I am a power-user and total I'm using no more than 25GB of space for applications, data, and multimedia. You mentioned she does digital media editing? Is that video or images? Video, then go for the 250, if not, get yourself a fast little 80GB.
Memory, eh, probably out running your processor on this one... Might be able to use all 2GB one day. *shrugs*