It is a modifier that reads mdd and pc2 meshcache format files. At each scene update it opens the file, reads the current frame and closes the file. So you will see a live update whenever the file changes ( like when you re-export your character animation from 3ds max or maya for example). This way it also uses little memory, but keeps your hard-drive busy too. It still runs faster than realtime on my computer, to my surprise. You can re-time the animation with an f-curve and re-export it to a new cache. It is nice for making it slow motion.
Also supports anisculpting on your cache.
Thanks to krupa and pepeland for their donations and support! This feature is already in the blender patch tracker: Link
Forum thread with more details on the Blender Artists Forum : Link