General query on the way caching works

As a newcomer to the concept of caching to improve speed I read Jacob's helpful W3TC plugin post, including the sentences. "What [caching plugins] do is cache the first visitor's request of a new page to a plain HTML file on the server, then when another visitor comes through and requests the same page, so long as the page wasn't updated in your administration section [...] the cached HTML page will be served." That's clear, but can someone please just confirm to me, as someone just about to plug content into big static a new site with the expectation of having to tweak it over a period of weeks, that when is page is updated, the new version then gets cached in the same way. Seems likely but I just need to hear someone say it. Also, can someone point me to reasonably detailed info on the configuration categories in the new version (0.9.2.9) of W3TC? Thanks ...