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Hibernate version: 3.0

This part is from hibernate_reference (chapter 13:batch processing):

..."That's because Hibernate
caches all the newly inserted Customer instances in the session-level cache"...

Hibernate is very efficient when we make some comparison to other ORMs, is this because of such a big cache? Isn't this too big waste of memory:-).

Yes, Memorey will be wasted but there is a use ie.,
Hibernate avoids the overhead of retrieving objects from the
database each time.

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Certainly not. If you do not use second level cache, then queries are fired to database to retrieve the objects. Database operations are considered to be slow, resource consuming and expensive. If you enable second level cache, then the objects can be resolved in the memory and the operation is much faster.

Also, you do have ways of specifying which object to cache, how long to cache(the eviction policy). So you do have control of how and how many objects stay in memory(cache)