Size, proximity to the CPU and speed. L1 stores data and instructions for immediate use and is the fastest but also fairly small, generally measured in KB, L2 is slower but significantly larger, sometimes shared between cores, sometimes only used by a single core it serves as a much faster access than the main system memory, L3 is the slowest but also the largest on CPUs that have it, it too is much faster than having to call the system memory and is shared among all of the cores on a CPU. Within a certain family line of CPUs more L2 or L3 will generally add a slight performance increase, but it the performance effect is hard to tell just by looking at specs especially when comparing between lines, because the performance is effected by architecture significantly more.
No, cache numbers should not be considered when choosing a system, look at benchmarks for the CPU as a whole, a CPU with more cache than another with similar architecture may perform significantly faster in a certain task, or the difference might be negligible. We have made it to the day when the specs of a CPU are utterly meaningless, look at the benchmarks on sites like this to make your decisions, ignore the marketing data and the random specs because its more about how the various specs interact and the differences in performance can only be found experimentally not theoretically.
There was an article recently comparing AMD's Athlon II quad(no L3 cache) vs the Phenom II quad(has the L3 cache). These are exactly the same chips except for the L3 cache difference. Tom's was find a difference when it came to gaming and some synthetic testing/benchmarks, but not a significant one.
My suggestion is if you want to save money, go to the CPU that doesn't have L3, as CPUs with an L3 cache aren't significantly better performers than their L3-less counterparts.
It just depends on what the computer will be used for; if it is just for browsing, playing 3D games, and playing media, a CPU without the L3 cache will do. If you do a lot of encoding, programming, video editing, etc, then the CPU with a L3 cache will help significantly.