"Where" depends on how you handle it. MySQL does some caching internally. Memcache stores data on the server. You might cache dynamically generated html markup in .txt files, or session-specific data in your $_SESSION.
I was going to link to the Wikipedia page, but it seems uncharacteristically akward and helpless.
Basically, a "cache" is just an organized way to save data you plan on using again later, thereby saving time by only retrieving/ preparing it once and using it several (or many) times.
Adrian ~ facebook | gist/github
['66.215.156.37','208.75.149.97'] // ip,ip array!
"Take that sticker *off* your hat; you look stupid" --Wil Wheaton
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