Pump cavitation means that cavities or bubbles are forming in the water that is being pumped. These cavities form at the low pressure or suction side of the pump.  Look here for a more detailed explanation of cavitation.

When these cavities collapse they form small shock waves that will seriously damage metal parts. Parts of a pressure washer pump that are most susceptible to cavitation are the pump head valve seats, which are usually made of brass. 

If you notice vibration in the hose and your pump is loosing pressure, check the valves.  If the valves look Ok then pull out the o-rings that the valve sits on.  Now check the seat where the o-ring nestles.  If you see grooves in the brass seat then your pump has been subjected to cavitation.  The collapsing bubbles have worked their way under the o-ring and into the pumping chamber by making a pathway in the brass.  Replacing the o-ring will help for a while but the problem will not go away.

If this has happened to you it is likely time for a new pump.  The cost of a new head with seals and valves is quite expensive.