Before you do that you need to back up your existing content on your current hard drive, and that usually requires you to purchase an external hard drive (this is in addition to your replacement hard drive).
Hard drive prices can vary, you just need to make sure that it is a 2.5" Serial ATA Notebook HDD. Newegg is a good place to shop for those...
It's a shame I don't know any of this and I want to get into the gaming industry. I guess that means more school for me lol.
Cache is memory attached to the HDD to act as a swapfile for performance enhancement. Again the larger the cache the better the performance, but I don't really know if there would be a noticeable difference in the PS3.
So I suggest you don't really worry too much about RPM and cache so much, since the PS3 was designed for hard drives that are on the slower side of the scale...
Well since Logical Dolphin helped you with how to install one, heres a great HDD to use!
All the free space you should ever use, and it works perfectly! Hell, any 2.5" HDD from Western Digital works well!
Last time I checked a 1TB drive it was too thick to fit in a PS3. Check the dimensions (don't remember the number offhand).