The ability to cache data is very important to performance...especially if you have a large number of categories, products, and/or orders. I recommend creating a directory ABOVE the publicly accessible document root and giving it proper permissions for the server read/write. Creating it ABOVE the document root ensures that would-be hackers cannot access it with their web browser. Set your cache directory settings to this filepath to keep it from being stored in the "/tmp" folder which will cause issues.
Once you have the cache folder created and settings configured TURN ON THE CACHE FEATURES. This is especially effective with the category box!
The Page Cache contribution was created for those stores that have so many contributions installed it would be nearly impossible to optimize the code. The correct answer is to not bloat the store with contributions that are not needed...but if you find yourself in that position then Page Cache may be for you. I use the Page Cache contribution as a last resort...not as a first line choice.
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