The Hibernate second level cache is used to cache items between session invocations. Hibernate always uses it's session as a first level cache, but if you want to avoid database hits between sessions you need a second level cache. If you want these caches to stay in synch between several instances of your application, you need a distributed second level cache.
Memcached is a fantastically fast distributed cache, so why not use that? Once I build a jar of the hibernate-memcached project you'll be able to include it in your application and tell Hibernate to use it. Telling Hibernate to use it means adding the cache_provider property to your hibernate.cfg.xml, or your Spring LocalSessionFactoryBean if you're using that. The hiberante.cfg.xml looks like this...
Then, in your mappings you tell Hibernate that you want instances of your persistent objects to be cached, or collections from relation ships to be cached. Once Hibernate knows what you want cached you can watch it pump stuff into memcached, which is good clean geeky fun. Fire up memcahed (on windows or linux) using the -vv command line option to make it run "very verbose". You can see it storing and responding for each operation taken.
You can play with the code straight out of subversion at google code. It will actually work and cache stuff, but it is currently hardcoded to look only at localhost:11211 for a memcached instance. I'll get around to making it configurable. To build the code you'll need Maven2. I highly recommend using Don Brown's no-suck port of maven2 actually.
More to come...