According to Matt Cutts during the You&A session at SMX Advanced, Google Caffeine is live!
In the official announcement, Google reps have said that they created this new index because "content on the Web is blossoming. It's growing not just in size and numbers but with the advent of video, images, news and real-time updates; the average webpage is richer and more complex. In addition, people's expectations for search are higher than they used to be. Searchers want to find the latest relevant content and publishers expect to be found the instant they publish."
What this means to the user is that content will be available to searchers more quickly. In doing a quick search for Matt Cutts, the latest post added to the index was that of Matt McGee of Search Engine Land only 26 minutes ago. That's FAST!
What this means for the SEO is that creating and publishing new, valuable, optimized content on a regular basis is going to be key in driving large amounts traffic from the Google SERPs.