Disk-based cache settings

This configuration allows disk based caching for content stored in IIS web application databases.

The entry that needs to be added in web.config is as below
<BlobCache location="C:\Cache" path="\.(gif|jpg|png|css|js|)$" maxSize="1" enabled="true" />

For more detailed information go through the article below
http://office.microsoft.com/en-us/sharepointserver/HA101762841033.aspx