The idea is to put a caching layer between filesystems, that tend to be slow, and the user, who is impatient. This is accomplished by the fscache kernel module, and the cachefilesd user space daemon. The kernel module intercepts what would be disk/network access and redirects it to the daemon. The daemon uses local media, which supposedly is faster, to cache recent data.
The new Linux native implementation is very generic, and can be used to accelerate anything like floppies and CD-ROMs. I am interested in this because I find NFS slow.
Read more about it at Linux Magazine.