In IE go to Tools, Internet options.
You'll see clear internet temp files and a setting button to adjust usage.
clearing cache means deleting those files.
A browser will store in your temp folder a web page and it's images.
Say you visit www.barvin.com
the browser downloads the home page and images.
you then click a link and browse to another page on the site, that page then
downloads.
But if that page has the same images as the home page did then the browser
grabs those images from the temp folder (cache) rather then download again.
If you then hit your back button back to the home page the browser reloads
the home page from the cache.
All this is done to give you a faster experience.
Clearing cache removes excess files from your pc and it forces the browser
to download fresh your web pages.
I myself keep my allowable space for the cache very low to waste less space
and to force more frequent refreshs.