If you go to the Cache Management section of the admin area you can see what it caches (configuration, layout configuration, block html output, translations, eav types, etc). I am no expert on Magento's caching mechanisms but here are a few random tidbits that might be helpful (maybe). (Also note that I am only familiar with Magento 1.3.x, not 1.4.x so things could have changed).
The caching is actually stored in the var/cache directory. There are a ton of directories in there (mage--0, mage--1, mage--2) and each directory has the cache files. Do a ls var/cache/mage*/*
to see all the files.
Configuration - This source for the configuration is varied. Your app/etc/local.xml, and all of the config.xml files (that are in each module's etc dir) are combined together to make one big configuration object. Then Magento reads from the core_config_data table to update the configuration object. Then the configuration is written to a cache file so that next time a request is made it doesn't need to open a ton of config files and hit the database. Somehow this info gets stored in a bunch of files under var/cache. For some insight do a ls var/cache/mage*/*CONF*
.
Layout - This is a lot like the configuration... there are a bunch of xml files in the app/design/frontendOrAdminhtml/yournamespace/layout/ directory and all these are merged into one layout configuration object, then cached in the cache directory.
Block HTML - The actual html generated by a block is cached. Each block is able to decide how long it is going to be cached.
Lastly, to (not really) answer your question about if the cache is per website or store, I can't really say since I haven't had the need to setup a multi-website/multi-store shop yet. It looks like there may be some store/website-specific files, but I can't see that they are really organized in a logical way. For example, in one of my instances I see a var/cache/mage--f/mage---LAYOUT_FRONTEND_STORE0_DEFAULT_BLANK_SEO file and a var/cache/mage--f/mage---LAYOUT_FRONTEND_STORE1_DEFAULT_BLANK_SEO... but then again, I only have one store configured and those two files have the same contents. Good luck with that!