I guess is a really strange behave. What is your webserver ? Apache ? Nginx ?
In production.rb/development.rb if I put config.cache_classes = true then action caching is not working . I am using memcache_store as cache store. When I put config.cache_classes = false then action caching is working.
Also cache_store = :memcache is laso not working . I have to put ActionController::Base.cache_store = :mem_cache_store in application.rb to make caching work. I am using Rails 2.1