This paper analyses a tree hierarchical network architecture employing pooled cache memories and multicasting network capability to deliver Interactive Video on Demand (I-VoD) services. The cache memories are located close to the customer and are able to store segments of the most popular programs in a dynamic way. They can reduce both transmission bandwidth and storage capacity required in the network, thus reinforcing the substantial network resource savings achievable through the multicasting feature allowed in the ATM switches. In the present paper, we analyse this type of VoD network with the aim to provide optimal dimensioning of the cache memories and to evaluate the load reduction produced in the servers and in the links as a function of the main system parameters (cache memory dimensions, number and popularity of programs, number of user clusters involved, etc.).