The cache size used to have a huge impact on drive performance for two reasons:
On read, it meant that the drive could read in an entire track (20 to 50 or more blocks) once the data were available under the read head. If you were then to ask for the next block (which is very, very common) you do not have to endure another rotation of the platter (at 8.5 milliseconds for each complete spin at 7200 RPM) before accessing the next block of data.
On write, the drive could accept a track's worth or more, and tell Mac OS X, "go ahead, I got it" before proceeding to actually write out the data to the platters.
As caches have become even larger, (many many times the size of a track) the Incremental increase in performance over a track-sized cache is less pronounced, but still measurable.
Executive summary:
The bigger the cache, the better.
But differences between drives that each have large caches will not be as pronounced as in the past.