First of all i want everyone to read those

http://www.mysqlperformanceblog.com/2006/08/09/cache-performance-comparison/

http://jpipes.com/index.php?/archives/100-Benchmarking-CacheEngine-vs.-the-MySQL-Query-Cache.html

http://74.125.67.132/translate_c?hl=tr&sl=tr&tl=en&u=http://www.kodaman.org/yazi/cache-proxy-web-ustunde-yuksek&prev=hp&usg=ALkJrhhXLoRYwjz7cSXuNspw2PxQj3BYcw
last one is translated by google translate

File Cache :

If your data is not updated much and your site has static data as majority this cache system is for you.
Pros:
- Better Performance
- Good for pages which dont get edited for long time
Cons:
- Slower when updating the data
- not suitable for multi-server sites

MySQL Cache:

Pros:
- Faster
- Good for pages updating much
Cons:
- not good for mass user communities
- unnecessary server load for old pages