Every time that you visit a website, the contents and page is downloaded from the website's server. There is no way to stop this because it is required to view the page.

Cache is some webpages that are kept stored in temporary memory to allow for faster loading times. They are not required to load a website and setting the cache limit should stop cache from being saved.

I personally don't recommend doing so, but you can if you wish.

All the contents that make up the web page have to be "downloaded" to be able to see the entire web page. If the cache is enabled, not as much will need to be downloaded when loading the 2nd and subsequent pages for that website, or when you revisit that website in the future. Unless you have another reason for not wanting to "cache" content, it's foolish to disable the entire cache.

Firefox has a memory cache and an image cache apart from the disk cache.

If you are in Private Browsing mode then the disk cache gets disabled.
As already posted, all content that gets displayed need to be downloaded and stored somewhere (memory or disk) to be able to render this content.
This is the same as with viewing files in other applications that will be saved in the %temp% folder.

See also:

• Image Block: https://addons.mozilla.org/firefox/addon/image-block/
• ImgLikeOpera: https://addons.mozilla.org/firefox/addon/imglikeopera/
• QuickImage: https://addons.mozilla.org/firefox/addon/8126