Not quite -- the HDD cache is much much much bigger than the amount of RAM in the system. The archive files are huge, compressed files containing meshes, textures, and other assets. Data FROM THEM is loaded into memory when needed. If an HDD is there, the archive files is copied to the HDD, and so loading data from the archive files benefits from the HDD's speed. Otherwise the data is loaded from the archives on the optical drive.
The archives are copied over to the HDD (if present) when you first load the game (and again if you clear the cache or play enough different games that the cache gets overwritten).