Who really need a cache? Everybody. The cache holds the information. Without one, you are severely limited on power and efficientcy. It's kinda Tiered: L1 cache is the fastest, holds operations the Processor is currently processing, etc. Very Important for efficiency. All current intel Processors, save the Pentium M, have 28kb(12KB+16KB), and that limits them quite a bit, dispite lowering manufactuting Costs(Pentium M 32KB+32KB). AMD, on the other hand, universally uses 128KB, or 64KB+64KB. This is one of the things that greatly increases performance of AMD.
L2 cache is next up, It holds everything your processor is using, but isn't on the highest priorty. Many people tend to ignore L1 cache completely for L2 cache. However, unless you're editing videos, or really, really over-multitasking, you don't need more than 512KB. Any lower, and you have other performace issues(Celeron), higher, doesn't effect it much. Celerons Use 256KB, which is tiny, although bigger than Sony's Cell, with a grand total of 0 bits, and are okay for people who just use, say, word processors. Big mistake for games or anything requiring a medium to high end PC. AMD typically uses 512KB, although with Operaton and FX series processors they've gone up to 1MB. P4's I believe, started with 512KB, then went up to 1MB, and now those featuring "EM64T"(which is less efficient, and, well, worse, than AMD's 64 bit technology) have 2MB, which is overkill. Dual-core processors, however, require 2 L2 caches to run effectively, which is why the Cell operates almost as a 1-core, only not quite as good. The Athlon 64 x2 Series for AMD just uses two 512KB caches, but Operatons newer Athlon 64 x2's (2.4GHZ or greater) and I believe the FX-60 have 2 1MB caches. Intel's Pentium D's and Dual-core Extreme Edition both use x2 1MB. Note: For Dual-core Processors, this is not overkill. However, AMD still outperforms Intel, Especially in the Performace Per $1 category. Then you move up to RAM, which stores everything too big for the Caches, and the Virtual Memory, which is on your HD, for when windows uses it all up for you.
I'm not saying Intel is bad, I mean, it's okay... they are just inefficient, and generate too much heat.
Fine, then if the cache matters so much to you, AMD would suck in your opinion because their caches are tiny compared to their Intel counterparts.
Inefficient and generating too much heat?! That's the EXACT OPPOSITE of Intel chips. Pentium Ms run better than any CPU I have ever seen. Now, you want to speak of overheating, then the AMD Athlon 64-FX is the choice for you.