Is it possible to bake dynamic paint waves simulation as a black and white displacement map texture? I am working with the dynamic paint waves function to simulate ripples along the surface of a sphere. I was wondering if it is possible to bake the deformation into a black and white displacement map texture so that I could use that texture with a displacement modifier instead of dynamic paint. 

Also, another question I have is how do I bake(point cache) the animation on file? When I press bake, it doesn't let me choose where I want to save the files and the bake doesn't even play in real time. I come from 3ds max and the flex modifier is similar to this. I am able to use a point cache modifier to save the animation to a sequence of files so that I can preview the simulation in real time. It also allows me to save an instance of the simulation so that I don't need to re-simulate every time. Is there a way to point cache the dynamic paint wave simulation onto file?
Dynamic Paint can output to different targets depending on the Format. In your example you're baking to Vertex weights. However, changing it to Image Sequence will give you a new Output panel that allows the output to be baked to a sequence of images :

Once stored as a series of images you can use an Image Texture node set to 'Image Sequence' to retrieve the data and use it to drive the Displacement.