How can I set my images and css to be cached by browsers for better performance?

In apache, using an .htaccess file, you can do this:

# 365 days
<filesMatch "\.(ico|pdf|flv|jpg|jpeg|png|gif|swf)$">
Header set Cache-Control "max-age=31536000, public"
</filesMatch>

# 3 days
<filesMatch "\.(css|js)$">
Header set Cache-Control "max-age=259200, public"
</filesMatch>

This will set the expiration on your images, flash and video files to 365 days, and your css and js files to 3 days.  (max-age is in seconds)

3 days is a little short, but if you make changes to these files somewhat regularly, just bear in mind that you may have some time before all users see the changes.