This one is a bit tricky, but i'll see if i can put it together. Android is build on Java and "runs" inside of a Java Virtual Machine called Dalvik. Much like a web browser, the virtual machine produces cache over time. This cache, by default, is left on the system partition which may be undesirable because that system partition real estate is too valuable to be consumed by cache. So, a script that moves that cache to another partition such as cache, data, or ext (sdcard) frees up more system storage for apps or whatever. If I missed something, please feel free to elaborate.
I read on XDA somewhere there is a negative to that, but forgot what it was--maybe someone can help with that so you are informed enough to decide if you want to do it. I am not techy enough to understand it. Most people do cachesd but I don't know how many do the dalvik2cache.
The only problem with having Dalvik on your /cache partition (internal memory) is that it can interfere with Market Updates if the Dalvik size grows too large. Every time your Market updates, it writes a "Download.apk" file to your /cache. If you prefer to keep your Dalvik on your /cache (makes more rooms for app on /data), you can simply use Root Explorer to delete the "Download.apk" files from your /cache after a Market update is complete (they are completely unnecessary).