How to use browser caching for images? I am learning to improve Drupal's performance and I discovered Google's PageSpeed Insights tool. It urges me to use browser caching and presents me a list of all my images at mytheme/images and default/files. To be honest, I am not too sure about what this means. I assumed that Drupal's default caching could handle this, but apparently that is not the case, since caching is already enabled at Performance (both minimal lifetime and expiration time are set to 1 hour).

How can I cache all those images as well? Should I install some extra modules like Varnish or Boost to solve this? As a beginner, I can't really wrap my head around all these performance modules and what they do.
Images are directly served by the web server. You need to configure your web server to server images (and other files) with the appropriate headers. On Apache HTTP server, this is usually done with the mod_expires module.