The Western Digital Velociraptor is pretty tough to beat. Near SSD performance (depending on what you are doing) and reliable. For compiling code it's definitely the best choice.
Ehh; not yet trusting SSDs (or back in 2011 when I did my last computer builds), I prefer 15,000 RPM SAS enterprise drives. 50% greater rotational speed, SAS should be faster than SATA, and even Seagate (true) enterprise disks should be more reliable than WD consumer grade disks.
It certainly can be. Theoretically your OS should be pretty good about caching files in memory, but in practice I've measured significant differences when compiling large C++ projects on a fast SSD.