http://forums.asp.net/1236822/ShowPost.aspx

1. Module Settings Cache Time is the deciding factor on if a module is cached or not.  Setting the Cache time to 0 will disable output caching.

2. Yes, the module will still be cached even if the Host Settings Caching is disabled.  The Host Settings for Cache are for internal caching like the PortalSettings and TabInfo.

3. To get around the problems of making updates to a module that has output caching enabled, set the cache time to 0, make the updates, when you have it like you want it, set the cache time back.