excerpt from Food Insight
Caffeine is often touted as having a beneficial impact on athletic performance, and research has shown this to be true. Caffeine has been shown to decrease performance times and increase endurance when consumed prior to an event. Recent research suggests that this may be related to caffeine's ability to increase perceived energy, as the stimulating effect it has on the brain may reduce feelings of exercise fatigue. Although caffeine cannot render "superman" benefits, it may help an athlete attain optimal performance in certain types of athletic events.
Although caffeine has been shown to help performance, moderation is still important as moderate amounts are more likely to have a beneficial effect on performance than much larger amounts. Moderate consumption is considered 300mg/day or three 8-ounce cups of coffee. Large amounts of caffeine may bring on jittery feelings that are unnecessary before a big competition. Individual metabolism and sensitivities to caffeine may vary, and certain sub-populations such as children and pregnant women may want to limit caffeine. These groups should monitor their caffeine intake and talk with a healthcare provider about appropriate consumption levels.
Athletes may be advised to avoid caffeine due to the belief that it is dehydrating; however, caffeine's mild diuretic effect is typical of any fluid, including water. In addition, research has shown that caffeinated beverages can and do contribute to hydration.