This tells Smarty whether or not to cache the output of the templates to the $cache_dir. By default this is set to 0 ie disabled. If your templates generate redundant content, it is advisable to turn on $caching, as this will result in significant performance gains.
You can also have multiple caches for the same template.
A value of 1 or 2 enables caching.
A value of 1 tells Smarty to use the current $cache_lifetime variable to determine if the cache has expired.
A value of 2 tells Smarty to use the $cache_lifetime value at the time the cache was generated. This way you can set the $cache_lifetime just before fetching the template to have granular control over when that particular cache expires. See also is_cached().
If $compile_check is enabled, the cached content will be regenerated if any of the templates or config files that are part of this cache are changed.
If $force_compile is enabled, the cached content will always be regenerated.
See also $cache_dir, $cache_lifetime, $cache_handler_func, $cache_modified_check, is_cached() and the caching section.