Cache blocks in Magento.

Observer.php

<?php
/**
 * Observer to core_block_abstract_to_html_before
 * 
 * Specifies required cache information like key (block id)
 * and tag (Mage_Cms_Model_Block::CACHE_TAG).
 */
 public function cmsBlockCache($observer)
 {
 	if ($block instanceof Mage_Cms_Block_Widget_Block || $block instanceof Mage_Cms_Block_Block)
 	{
 		$cacheKeyData = array(
 			Mage_Cms_Model_Block::CACHE_TAG,
 			$block->getBlockId(),
 			Mage::app()->getStore()->getId()
 		);
 		
 		$block->setCacheKey(implode('_', $cacheKeyData));
 		
 		$block->setCacheTags(
 			Mage_Cms_Model_Block::CACHE_TAG
 		);
 		
 		$block->setCacheLifetime(false);
 	}
 }