I really dont understand the importance of cache and its levels.
Can you educate me about it
=)
If you want to really read up on it, google it, but to give you a very quick and dirty break down of how it benefits a computer, this is why.
You do something on your computer,
Your input on your computer triggers a command that is processed by the CPU, the CPU first looks for the fastest place possible for instruction sets on what to do, which is the cache. It stores commands and instructions that the CPU can use to execute it's job. If it is not found in cache, then it looks the the next quickest, but over all slower spot, RAM. If RAM doesn't have the proper info it looks to your hard drive (virtual memory) which is the slowest.
So, in theory the more cache you have, the more instruction sets it can load and the faster your processor is. Of course you see the biggest increase on multi-tasking performance, but since every OS under the sun these days is a multi-user multitasking platform, then it should fit right in.
This is just a general explanation, if you want more in depth I would suggest you google some tech articles, hit up wikipedia and go read some articles that both Intel and AMD put out on their product.