Well, since you asked, CAGED is a system of scale fingerings. There are five patterns that interlock across the fretboard (the lydian and locrian are left out as root notes). As opposed to the "three notes per string" system, which requires you to stretch your pinky out for the third note, the CAGED system uses a principle of one finger per fret. In other words, the CAGED scale patterns can all be played in the space of five frets or less (you have to shift up or down one fret sometimes).

Here's what I mean -



G Aeolian (CAGED)

E - 3 - 5 6 -
B - 3 4 - 6 -
G 2 3 - 5 - -
D - 3 - 5 - -
A - 3 - 5 6 -
E - 3 - 5 6 -


G Aeolian (Three note)

E - - - 5 6 - 8
B - - 4 - 6 - 8
G - 3 - 5 - 7 -
D - 3 - 5 - 7 -
A - 3 - 5 6 - -
E - 3 - 5 6 - -



So, as you can see, it's the same exact scale, just a different way of visualizing it. Some people prefer one over the other, but I've found that each has it's uses. The Three-Note is great for shredding, because you don't have to change your rhythm (it's always 3 notes per string). CAGED is perfect for chords and arpeggios.

Does that help?