package installer is the application that installs (and removes) applications from your tablet. when you see that message it does not necessarily mean you are replacing Application Package Installer, it may mean that you are installing an application that already exists on your device (could be a newer version, etc).
Until you learn a little more about your tablet, and how it works you really should not need to worry about the cache.
Ok thank you! It only comes up when I push the Home button to display the sub-menu. I thought perhaps it had to do with the Android op system itself. I could not find any information in my manual or on the Coby website. Thanks for your reply!