yes open ie7, on right upper side, click tools, internet option, or you cant go to your control panel, then internet options, now. click the advanced tab. scroll down to Security and check the box for "empty temporary internet files when closed". there are also a few registry hacks but i dont just give these out, u can search for them yourself.
personally i dont use ie7 or any ie.
The OP is already doing that...
The cache is already being deleted using the advanced settings option "Empty Temporary Internet Files folder when browser is closed".
Actually the IE 8 beta is out, I've tried it and its pretty stable. Also the InPrivate Browing works too which doesn't save anything. (Except Bookmarks if i remember correctly.)