Almost ironical my blog's name has Caffeine too!
Anyway, it's pretty much still hot, and everywhere - I mean - even the BBC has a story on this!
In a crux: it's Google's new search engine. Some say it leaves Bing behind, some say nothing (like myself, since I haven't used it properly yet).
Google says (via BBC - I'm a bit too lazy to check out their blog :P ) that it is the "first step in improving the speed, accuracy and comprehensiveness of search results".
Basically, the result order/layout, it's "freshness" or "recency" of articles and other under-the-hood things have been improved. Caffeine will replace the main search engine once testing is complete.
Well - either way, I think I'll still use Google heh. This isn't making me drool more, but improvements are welcome.
EDIT: BetaNews has an article on what's different in Caffeine. Take a look here.