I am for encryption, but most users would not understand that encrypting data means more overhead for your PC, which means that it could go slower.

As for file caching ... great idea, but how? 70% of the users on Gnutella are stinkin' freeloaders who do not even share files. Now you are going to have most of the servents wanting to use other people's file caches, but not cache for anyone else. All this will do is make centralized bottlenecks in the network ... unless you force everyone (or at least all the ultrapeers) to cache.