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From the Opera Knowledge Base:
Please note that a larger cache size might actually slow down older systems. In general, we recommend that users with older systems (early Pentiums and older) set their disk cache to 2 MB and memory cache to automatic or 4 MB.
A very large cache might also cause Opera to take longer to start, if the cache is filled up. You can avoid this by enabling "Empty on exit".
If you enable automatic memory cache, it will take up about 10% of the available RAM on your system.