All modern hard disks have an internal cache, that is used as a buffer between the fast
PC system and the slow mechanics of the hard disk. It is discussed in some detail here.
The size of the cache is a commonly-quoted (and often overhyped) performance specification. It of course has some impact on overall
performance, but the exact size of the cache is not nearly as important as many people
have been led to believe. The impact of the cache is on burst transfers of data over the
external interface.
The type of the cache is rarely mentioned in specification sheets, but its
speed has some small impact on performance as well. Since reads and writes depending on
the cache are themselves small, differences in cache technologies don't make much
real-world performance difference at all. Most disks use for cache whatever current memory technology is mainstream and inexpensive;
today, that's SDRAM.
Next: Write Caching Policy
