Performance
Caching
A lot of what CE Image does is complex and processor intensive. For this reason, CE Image will check to see if the source image has changed (the same goes for the watermark images, and remote images, depending on your configuration settings), and only recreates the image if it needs to. This saves a ton of processing on the server side, and makes the class quick.
A few different methods/settings create results that are not cached by CE Image, namely: ascii_art, average_color, top_colors, and the Amazon S3 bucket. If you are using any of those, it is strongly recommended that you employ additional caching! If you do not use caching in the above instances, your page speed will drastically slow, as the entire process of generating the requested content may be run on every page load!
In fact, you will probably notice speed improvements by employing caching with all images that you use CE Image with, even if you are not using any of the parameters mentioned above. If you can cache, please do (unless, of course, you have a good reason not to).