Your users will work in cache until the data in flushed to the disk. The higher the cache the fast it should technically be but that it why you increase the chance of losing data when it hasnt been written to the disk if you crash.
I would suggest you try using a copy of FMS to see if it helps. Download the trial copy. FMS is optimized for these kinds of scenarios and should handle the data much better than a box set up as a host in a peer 2 peer.
I just renewed my subscription to technet, so I can now play around with the developer version of FMS
I havent bothered with technet for about a year now.
I understand how the cache should work, but it seems to make no difference at all between 8mb and 256 mb perhaps its just the way im manipulating the data etc.
Anyway, ill experiment with the cache hit rate with server, maybe that will give me an idea whats going on under the hood a little more.