Back in the old days of WordPress 2.1 (yes, those days…. where you had to painstakingly do everything, not like these days where you youngsters get to just dictate and the post magically appears), Automattic had introduced file-based object caching. And the people were happy.
But then, when 2.5 rolled around, it was like the king forgot its people. The file-based object caching was nowhere to be found. So Neosmart fought for the people. And introduced File-based Caching. In all seriousness though, this basically is a different type of caching system than others and will effect the performance of your blog (for the better) differently than other caching systems. It’s all about what it does, and is it suited for your blog.