Here are some of my findings:
1) BLOB Cache
Binary Large Object cache or BLOB cache is a disk based cache in SharePoint. This means that the data is stored on the Hard-Disk of the Web Front End Server.
Initially for the first call, data is fetched from the database and stored on the WFE. Any further calls to the same data are responded with the cached version hence avoiding a call to the database.
It can be used to store data in a variety of format including images, audio, video etc. Furthermore, you can configure it to store files based on extension types to suite your environment. (Eg: jpg, js, css etc)
The BLOB cache is turned off by default. You will have to enable it from the web.config file of your web application if you want to use it.
To enable it, open the relevant web.config file and find the following line:
<BlobCache location="C:\blobCache" path="\.(gif|jpg|png|css|js)$" maxSize="10" enabled="false"/>
change that line to:
<BlobCache location="C:\blobCache" path="\.(gif|jpg|png|css|js)$" maxSize="10" max-age="86400" enabled="true" />
a. location is the location on the hard disk where your cache will be stored.
b. path is the regular expression used to determine the type of data to be stored
c. maxSize is the size in GB of the cache
d. max-age specifies the maximum amount of time (in seconds) that the client browser caches files. If the downloaded items have not expired since the last download, the same items are not requested again when the page is requested. The max-age attribute is set by default to 86400 seconds (that is, 24 hours), but it can be set to a time period of 0 or greater.
e. enabled turns the caching on if true and turns it off if false.
2) Page Output Cache
SharePoint supports something called as cache profiles in the output cache. This means that different profiles of the page are created for groups with different levels of access to the page. The page is rendered initially when the first request is made and cached. Now if another user with the same access rights loads the page, then it is served from the cache. This is done for each group with different set of permissions. Find more information about the Page output cache here.
3) Object Cache
Object Cache can be said as the most popular of the SharePoint caches. It is a Memory based cache. This means that the data is stored in the RAM of the Web Front End Server. As a result of this, this cache is reset if the application pool of the web app is recycled.
The publishing features of a Site Collection need to be enabled for this cache to become available. And due to this, it is available only in SharePoint Server 2010 and not SharePoint 2010 Foundation.
A variety of functionality in SharePoint 2010 uses the object cache internally. Mostly it is used to store data retrieved from Cross List Queries. Classes such as the PortalSiteMapProvider and CrossQueryListIfo use the object cache internally to store information returned. Other elements of SharePoint such as the Content Query WebPart and the Navigation also use the object cache for storing retrieved data.
Once the Publishing Features are enabled, you can configure the object cache from Site Actions-> Site Settings -> Site Collection Object Cache.
The default size of the object cache is set to 100 MB and the expiry time is set to 60 Seconds. You can adjust these values to suite your environment after careful consideration and testing. Ideally it should not be kept under 3 MB otherwise it will start affecting the performance.