L1 and L2 are levels of cache memory in a computer. If the computer processor can find the data it needs for its next operation in cache memory, it will save time compared to having to get it from random access memory. L1 is "level-1" cache memory, usually built onto the microprocessor chip itself. For example, the Intel MMX microprocessor comes with 32 thousand bytes of L1.
L2 (that is, level-2) cache memory is on a separate chip (possibly on an expansion card) that can be accessed more quickly than the larger "main" memory. A popular L2 cache memory size is 1,024 kilobytes (one megabyte).