CAVITATION: What It Is, And What It Isn't.
You will commonly hear people in the bike world refer to cavitation in the context of suspension. The simplest possible technical explanation: cavitation is when a small amount of your damper oil temporarily turns from liquid into vapour because of very low pressure (aka vacuum).
This occurs when the pressure drop over a damper piston equals or exceeds the gauge pressure in front of the piston. This is caused by any combination of high damper shaft velocities, insufficient gas charge pressure or insufficient pressure drop across base valve relative to the piston/midvalve pressure drop. To translate that technical description to something a bit simpler: imagine your shock shaft/piston moving through the oil in your shock as it compresses. If you were able to compress that shock fast enough that the pressure forcing the oil through your piston/shim stack couldn't keep up, you would draw a vacuum behind the piston, at which point a small amount of your oil would vaporise in order to fill the gap. This is cavitation: the point at which oil pressure behind the piston hits the fluid's vapor pressure (essentially once a vacuum is drawn). The typical symptom of this is a sharp compression spike, followed by a knock as the damper changes direction between compression and rebound, at which point the shock will extend, moving your main piston back and compressing the vapour until the pressure builds sufficiently for it to return to its liquid state, at which point the piston "slaps" the oil as rebound damping kicks in sharply, since you're now forcing oil through the rebound valving rather than simply using the piston to compress a gas. Cavitation is STRICTLY a dynamic phenomenon - that means it only happens under set circumstances, whilst things are moving.
What cavitation is NOT: when air gets mixed into your oil, the oil becomes aerated and looks foamy. This isn't cavitation (or "cavitated oil"), this is the result of air and oil emulsifying (an emulsion is the mixing of two different fluids - yes, gases are fluids - that aren't soluble in one another). Air and oil mixing can occur for a few reasons:
1. Because either your damper is an emulsion damper (such as Rockshox's non-Charger dampers), where there is no physical separation of air and oil
2. Because your damper is an open bath damper (most Marzocchi forks for example), where once again oil is not sealed off from air
3. Because your sealed damper (all rear shocks, Fox FIT cartridge forks, Charger dampers) has either been bled imperfectly or ingested air (this happens over time in certain dampers).
In sealed cartridge dampers, air in the damper means service time, but in emulsion and open bath dampers, aerated oil is not a factor you can easily control. Most oils have anti-foaming agents in them, however these simply break down bubbles more easily rather than preventing your oil from getting sloshed around with air in the first place. In open bath forks with high oil volumes, it's less of a concern because the most heavily aerated part of the oil typically sits well above the inlet/outlet ports of the damper.
If cavitation is truly occurring (it's a lot more rare than the use of the word would imply), it is absolutely nothing to do with the "quality" of the oil you're using, it is a function of the damper configuration (including valving, gas charge, design etc). In other words, changing your oil won't fix it.
So next time somebody tells you that you've got "cavitated oil" or that your suspension problems are caused by cavitating, or that a particular type of oil will prevent cavitation, please be aware that what they're actually telling you is that they don't fully understand what they're talking about.