diff --git a/IPython/core/displayhook.py b/IPython/core/displayhook.py
new file mode 100644
index 0000000..2f052fa
--- /dev/null
+++ b/IPython/core/displayhook.py
@@ -0,0 +1,284 @@
+# -*- coding: utf-8 -*-
+"""Displayhook for IPython.
+
+Authors:
+
+* Fernando Perez
+* Brian Granger
+"""
+
+#-----------------------------------------------------------------------------
+#       Copyright (C) 2008-2010 The IPython Development Team
+#       Copyright (C) 2001-2007 Fernando Perez <fperez@colorado.edu>
+#
+#  Distributed under the terms of the BSD License.  The full license is in
+#  the file COPYING, distributed as part of this software.
+#-----------------------------------------------------------------------------
+
+#-----------------------------------------------------------------------------
+# Imports
+#-----------------------------------------------------------------------------
+
+import __builtin__
+from pprint import PrettyPrinter
+pformat = PrettyPrinter().pformat
+
+from IPython.config.configurable import Configurable
+from IPython.core import prompts
+import IPython.utils.generics
+import IPython.utils.io
+from IPython.utils.traitlets import Instance
+from IPython.utils.warn import warn
+
+#-----------------------------------------------------------------------------
+# Main displayhook class
+#-----------------------------------------------------------------------------
+
+# TODO: The DisplayHook class should be split into two classes, one that
+# manages the prompts and their synchronization and another that just does the
+# displayhook logic and calls into the prompt manager.
+
+# TODO: Move the various attributes (cache_size, colors, input_sep,
+# output_sep, output_sep2, ps1, ps2, ps_out, pad_left). Some of these are also
+# attributes of InteractiveShell. They should be on ONE object only and the
+# other objects should ask that one object for their values.
+
+class DisplayHook(Configurable):
+    """The custom IPython displayhook to replace sys.displayhook.
+
+    This class does many things, but the basic idea is that it is a callable
+    that gets called anytime user code returns a value.
+
+    Currently this class does more than just the displayhook logic and that
+    extra logic should eventually be moved out of here.
+    """
+
+    shell = Instance('IPython.core.interactiveshell.InteractiveShellABC')
+
+    def __init__(self, shell=None, cache_size=1000,
+                 colors='NoColor', input_sep='\n',
+                 output_sep='\n', output_sep2='',
+                 ps1 = None, ps2 = None, ps_out = None, pad_left=True,
+                 config=None):
+        super(DisplayHook, self).__init__(shell=shell, config=config)
+
+        cache_size_min = 3
+        if cache_size <= 0:
+            self.do_full_cache = 0
+            cache_size = 0
+        elif cache_size < cache_size_min:
+            self.do_full_cache = 0
+            cache_size = 0
+            warn('caching was disabled (min value for cache size is %s).' %
+                 cache_size_min,level=3)
+        else:
+            self.do_full_cache = 1
+
+        self.cache_size = cache_size
+        self.input_sep = input_sep
+
+        # we need a reference to the user-level namespace
+        self.shell = shell
+
+        # Set input prompt strings and colors
+        if cache_size == 0:
+            if ps1.find('%n') > -1 or ps1.find(r'\#') > -1 \
+                   or ps1.find(r'\N') > -1:
+                ps1 = '>>> '
+            if ps2.find('%n') > -1 or ps2.find(r'\#') > -1 \
+                   or ps2.find(r'\N') > -1:
+                ps2 = '... '
+        self.ps1_str = self._set_prompt_str(ps1,'In [\\#]: ','>>> ')
+        self.ps2_str = self._set_prompt_str(ps2,'   .\\D.: ','... ')
+        self.ps_out_str = self._set_prompt_str(ps_out,'Out[\\#]: ','')
+
+        self.color_table = prompts.PromptColors
+        self.prompt1 = prompts.Prompt1(self,sep=input_sep,prompt=self.ps1_str,
+                               pad_left=pad_left)
+        self.prompt2 = prompts.Prompt2(self,prompt=self.ps2_str,pad_left=pad_left)
+        self.prompt_out = prompts.PromptOut(self,sep='',prompt=self.ps_out_str,
+                                    pad_left=pad_left)
+        self.set_colors(colors)
+
+        # other more normal stuff
+        # b/c each call to the In[] prompt raises it by 1, even the first.
+        self.prompt_count = 0
+        # Store the last prompt string each time, we need it for aligning
+        # continuation and auto-rewrite prompts
+        self.last_prompt = ''
+        self.output_sep = output_sep
+        self.output_sep2 = output_sep2
+        self._,self.__,self.___ = '','',''
+        self.pprint_types = map(type,[(),[],{}])
+
+        # these are deliberately global:
+        to_user_ns = {'_':self._,'__':self.__,'___':self.___}
+        self.shell.user_ns.update(to_user_ns)
+
+    def _set_prompt_str(self,p_str,cache_def,no_cache_def):
+        if p_str is None:
+            if self.do_full_cache:
+                return cache_def
+            else:
+                return no_cache_def
+        else:
+            return p_str
+                
+    def set_colors(self, colors):
+        """Set the active color scheme and configure colors for the three
+        prompt subsystems."""
+
+        # FIXME: This modifying of the global prompts.prompt_specials needs
+        # to be fixed. We need to refactor all of the prompts stuff to use
+        # proper configuration and traits notifications.
+        if colors.lower()=='nocolor':
+            prompts.prompt_specials = prompts.prompt_specials_nocolor
+        else:
+            prompts.prompt_specials = prompts.prompt_specials_color
+        
+        self.color_table.set_active_scheme(colors)
+        self.prompt1.set_colors()
+        self.prompt2.set_colors()
+        self.prompt_out.set_colors()
+
+    #-------------------------------------------------------------------------
+    # Methods used in __call__. Override these methods to modify the behavior
+    # of the displayhook.
+    #-------------------------------------------------------------------------
+
+    def check_for_underscore(self):
+        """Check if the user has set the '_' variable by hand."""
+        # If something injected a '_' variable in __builtin__, delete
+        # ipython's automatic one so we don't clobber that.  gettext() in
+        # particular uses _, so we need to stay away from it.
+        if '_' in __builtin__.__dict__:
+            try:
+                del self.shell.user_ns['_']
+            except KeyError:
+                pass
+
+    def quite(self):
+        """Should we silence the display hook because of ';'?"""
+        # do not print output if input ends in ';'
+        try:
+            if self.shell.input_hist[self.prompt_count].endswith(';\n'):
+                return True
+        except IndexError:
+            # some uses of ipshellembed may fail here
+            pass
+        return False
+
+    def write_output_prompt(self):
+        """Write the output prompt."""
+        # Use write, not print which adds an extra space.
+        IPython.utils.io.Term.cout.write(self.output_sep)
+        outprompt = str(self.prompt_out)
+        if self.do_full_cache:
+            IPython.utils.io.Term.cout.write(outprompt)
+
+    # TODO: Make this method an extension point. The previous implementation
+    # has both a result_display hook as well as a result_display generic
+    # function to customize the repr on a per class basis. We need to rethink
+    # the hooks mechanism before doing this though.
+    def compute_result_repr(self, result):
+        """Compute and return the repr of the object to be displayed.
+
+        This method only compute the string form of the repr and should NOT
+        actual print or write that to a stream. This method may also transform
+        the result itself, but the default implementation passes the original
+        through.
+        """
+        try:
+            if self.shell.pprint:
+                result_repr = pformat(result)
+                if '\n' in result_repr:
+                    # So that multi-line strings line up with the left column of
+                    # the screen, instead of having the output prompt mess up
+                    # their first line.
+                    result_repr = '\n' + result_repr
+            else:
+                result_repr = repr(result)
+        except TypeError:
+            # This happens when result.__repr__ doesn't return a string,
+            # such as when it returns None.
+            result_repr = '\n'
+        return result, result_repr
+
+    def write_result_repr(self, result_repr):
+        # We want to print because we want to always make sure we have a 
+        # newline, even if all the prompt separators are ''. This is the
+        # standard IPython behavior.
+        print >>IPython.utils.io.Term.cout, result_repr
+
+    def update_user_ns(self, result):
+        """Update user_ns with various things like _, __, _1, etc."""
+
+        # Avoid recursive reference when displaying _oh/Out
+        if result is not self.shell.user_ns['_oh']:
+            if len(self.shell.user_ns['_oh']) >= self.cache_size and self.do_full_cache:
+                warn('Output cache limit (currently '+
+                      `self.cache_size`+' entries) hit.\n'
+                     'Flushing cache and resetting history counter...\n'
+                     'The only history variables available will be _,__,___ and _1\n'
+                     'with the current result.')
+
+                self.flush()
+            # Don't overwrite '_' and friends if '_' is in __builtin__ (otherwise
+            # we cause buggy behavior for things like gettext).
+            if '_' not in __builtin__.__dict__:
+                self.___ = self.__
+                self.__ = self._
+                self._ = result
+                self.shell.user_ns.update({'_':self._,'__':self.__,'___':self.___})
+
+            # hackish access to top-level  namespace to create _1,_2... dynamically
+            to_main = {}
+            if self.do_full_cache:
+                new_result = '_'+`self.prompt_count`
+                to_main[new_result] = result
+                self.shell.user_ns.update(to_main)
+                self.shell.user_ns['_oh'][self.prompt_count] = result
+
+    def log_output(self, result):
+        """Log the output."""
+        if self.shell.logger.log_output:
+            self.shell.logger.log_write(repr(result),'output')
+
+    def finish_displayhook(self):
+        """Finish up all displayhook activities."""
+        IPython.utils.io.Term.cout.write(self.output_sep2)
+        IPython.utils.io.Term.cout.flush()
+
+    def __call__(self, result=None):
+        """Printing with history cache management.
+        
+        This is invoked everytime the interpreter needs to print, and is
+        activated by setting the variable sys.displayhook to it.
+        """
+        self.check_for_underscore()
+        if result is not None and not self.quite():
+            self.write_output_prompt()
+            result, result_repr = self.compute_result_repr(result)
+            self.write_result_repr(result_repr)
+            self.update_user_ns(result)
+            self.log_output(result)
+            self.finish_displayhook()
+
+    def flush(self):
+        if not self.do_full_cache:
+            raise ValueError,"You shouldn't have reached the cache flush "\
+                  "if full caching is not enabled!"
+        # delete auto-generated vars from global namespace
+        
+        for n in range(1,self.prompt_count + 1):
+            key = '_'+`n`
+            try:
+                del self.shell.user_ns[key]
+            except: pass
+        self.shell.user_ns['_oh'].clear()
+        
+        if '_' not in __builtin__.__dict__:
+            self.shell.user_ns.update({'_':None,'__':None, '___':None})
+        import gc
+        gc.collect() # xxx needed?
+
diff --git a/IPython/core/history.py b/IPython/core/history.py
index 14ad06e..d24e880 100644
--- a/IPython/core/history.py
+++ b/IPython/core/history.py
@@ -54,7 +54,7 @@ def magic_history(self, parameter_s = ''):
        confirmation first if it already exists.
     """
 
-    if not self.outputcache.do_full_cache:
+    if not self.displayhook.do_full_cache:
         print 'This feature is only available if numbered prompts are in use.'
         return
     opts,args = self.parse_options(parameter_s,'gnoptsrf:',mode='list')
diff --git a/IPython/core/hooks.py b/IPython/core/hooks.py
index 8639388..5d8a2ac 100644
--- a/IPython/core/hooks.py
+++ b/IPython/core/hooks.py
@@ -44,24 +44,19 @@ somewhere in your configuration files or ipython command line.
 import os, bisect
 import sys
 
-from pprint import PrettyPrinter
-
+from IPython.core.error import TryNext
 import IPython.utils.io
 from IPython.utils.process import shell
 
-from IPython.core.error import TryNext
-
 # List here all the default hooks.  For now it's just the editor functions
 # but over time we'll move here all the public API for user-accessible things.
 
-__all__ = ['editor', 'fix_error_editor', 'synchronize_with_editor', 'result_display',
+__all__ = ['editor', 'fix_error_editor', 'synchronize_with_editor',
            'input_prefilter', 'shutdown_hook', 'late_startup_hook',
-           'generate_prompt', 'generate_output_prompt','shell_hook',
+           'generate_prompt','shell_hook',
            'show_in_pager','pre_prompt_hook', 'pre_runcode_hook',
            'clipboard_get']
 
-pformat = PrettyPrinter().pformat
-
 def editor(self,filename, linenum=None):
     """Open the default editor at the given filename and linenumber.
 
@@ -221,12 +216,8 @@ def late_startup_hook(self):
 def generate_prompt(self, is_continuation):
     """ calculate and return a string with the prompt to display """
     if is_continuation:
-        return str(self.outputcache.prompt2)
-    return str(self.outputcache.prompt1)
-
-
-def generate_output_prompt(self):
-    return str(self.outputcache.prompt_out)
+        return str(self.displayhook.prompt2)
+    return str(self.displayhook.prompt1)
 
 
 def shell_hook(self,cmd):
diff --git a/IPython/core/interactiveshell.py b/IPython/core/interactiveshell.py
index 94a0fdf..7e0cc92 100644
--- a/IPython/core/interactiveshell.py
+++ b/IPython/core/interactiveshell.py
@@ -46,7 +46,7 @@ from IPython.core.logger import Logger
 from IPython.core.magic import Magic
 from IPython.core.plugin import PluginManager
 from IPython.core.prefilter import PrefilterManager
-from IPython.core.prompts import CachedOutput
+from IPython.core.displayhook import DisplayHook
 import IPython.core.hooks
 from IPython.external.Itpl import ItplNS
 from IPython.utils import PyColorize
@@ -206,8 +206,8 @@ class InteractiveShell(Configurable, Magic):
     # TODO: this part of prompt management should be moved to the frontends.
     # Use custom TraitTypes that convert '0'->'' and '\\n'->'\n'
     separate_in = SeparateStr('\n', config=True)
-    separate_out = SeparateStr('', config=True)
-    separate_out2 = SeparateStr('', config=True)
+    separate_out = SeparateStr('\n', config=True)
+    separate_out2 = SeparateStr('\n', config=True)
     system_header = Str('IPython system call: ', config=True)
     system_verbose = CBool(False, config=True)
     wildcards_case_sensitive = CBool(True, config=True)
@@ -428,10 +428,15 @@ class InteractiveShell(Configurable, Magic):
         IPython.utils.io.Term = Term
 
     def init_prompts(self):
-        # Initialize cache, set in/out prompts and printing system
-        self.outputcache = CachedOutput(self,
-                                        self.cache_size,
-                                        self.pprint,
+        # TODO: This is a pass for now because the prompts are managed inside
+        # the DisplayHook. Once there is a separate prompt manager, this 
+        # will initialize that object and all prompt related information.
+        pass
+
+    def init_displayhook(self):
+        # Initialize displayhook, set in/out prompts and printing system
+        self.displayhook = DisplayHook( shell=self,
+                                        cache_size=self.cache_size,
                                         input_sep = self.separate_in,
                                         output_sep = self.separate_out,
                                         output_sep2 = self.separate_out2,
@@ -439,15 +444,9 @@ class InteractiveShell(Configurable, Magic):
                                         ps2 = self.prompt_in2,
                                         ps_out = self.prompt_out,
                                         pad_left = self.prompts_pad_left)
-
-        # user may have over-ridden the default print hook:
-        try:
-            self.outputcache.__class__.display = self.hooks.display
-        except AttributeError:
-            pass
-
-    def init_displayhook(self):
-        self.display_trap = DisplayTrap(hook=self.outputcache)
+        # This is a context manager that installs/revmoes the displayhook at
+        # the appropriate time.
+        self.display_trap = DisplayTrap(hook=self.displayhook)
 
     def init_reload_doctest(self):
         # Do a proper resetting of doctest, including the necessary displayhook
@@ -1482,8 +1481,9 @@ class InteractiveShell(Configurable, Magic):
     #-------------------------------------------------------------------------
 
     def init_magics(self):
-        # Set user colors (don't do it in the constructor above so that it
-        # doesn't crash if colors option is invalid)
+        # FIXME: Move the color initialization to the DisplayHook, which
+        # should be split into a prompt manager and displayhook. We probably
+        # even need a centralize colors management object.
         self.magic_colors(self.colors)
         # History was moved to a separate module
         from . import history
diff --git a/IPython/core/logger.py b/IPython/core/logger.py
index be7bd7b..c177877 100644
--- a/IPython/core/logger.py
+++ b/IPython/core/logger.py
@@ -182,14 +182,14 @@ which already exists. But you must first start the logging process with
 
         # update the auto _i tables
         #print '***logging line',line_mod # dbg
-        #print '***cache_count', self.shell.outputcache.prompt_count # dbg
+        #print '***cache_count', self.shell.displayhook.prompt_count # dbg
         try:
             input_hist = self.shell.user_ns['_ih']
         except:
             #print 'userns:',self.shell.user_ns.keys()  # dbg
             return
         
-        out_cache = self.shell.outputcache
+        out_cache = self.shell.displayhook
 
         # add blank lines if the input cache fell out of sync.
         if out_cache.do_full_cache and \
@@ -208,15 +208,15 @@ which already exists. But you must first start the logging process with
 
         # hackish access to top-level namespace to create _i1,_i2... dynamically
         to_main = {'_i':self._i,'_ii':self._ii,'_iii':self._iii}
-        if self.shell.outputcache.do_full_cache:
-            in_num = self.shell.outputcache.prompt_count
+        if self.shell.displayhook.do_full_cache:
+            in_num = self.shell.displayhook.prompt_count
 
             # but if the opposite is true (a macro can produce multiple inputs
             # with no output display called), then bring the output counter in
             # sync:
             last_num = len(input_hist)-1
             if in_num != last_num:
-                in_num = self.shell.outputcache.prompt_count = last_num
+                in_num = self.shell.displayhook.prompt_count = last_num
             new_i = '_i%s' % in_num
             if continuation:
                 self._i00 = '%s%s\n' % (self.shell.user_ns[new_i],line_mod)
diff --git a/IPython/core/magic.py b/IPython/core/magic.py
index 5cd7429..d5ef5d4 100644
--- a/IPython/core/magic.py
+++ b/IPython/core/magic.py
@@ -2378,7 +2378,7 @@ Currently the magic system has the following functions:\n"""
         # use last_call to remember the state of the previous call, but don't
         # let it be clobbered by successive '-p' calls.
         try:
-            last_call[0] = self.shell.outputcache.prompt_count
+            last_call[0] = self.shell.displayhook.prompt_count
             if not opts_p:
                 last_call[1] = parameter_s
         except:
@@ -2566,12 +2566,12 @@ Defaulting color scheme to 'NoColor'"""
             
         # Set prompt colors
         try:
-            shell.outputcache.set_colors(new_scheme)
+            shell.displayhook.set_colors(new_scheme)
         except:
             color_switch_err('prompt')
         else:
             shell.colors = \
-                       shell.outputcache.color_table.active_scheme_name
+                       shell.displayhook.color_table.active_scheme_name
         # Set exception colors
         try:
             shell.InteractiveTB.set_colors(scheme = new_scheme)
@@ -2889,7 +2889,7 @@ Defaulting color scheme to 'NoColor'"""
         if ps:
             try:                
                 os.chdir(os.path.expanduser(ps))
-                if self.shell.term_title:
+                if hasattr(self.shell, 'term_title') and self.shell.term_title:
                     set_term_title('IPython: ' + abbrev_cwd())
             except OSError:
                 print sys.exc_info()[1]
@@ -2902,7 +2902,7 @@ Defaulting color scheme to 'NoColor'"""
                 
         else:
             os.chdir(self.shell.home_dir)
-            if self.shell.term_title:
+            if hasattr(self.shell, 'term_title') and self.shell.term_title:
                 set_term_title('IPython: ' + '~')
             cwd = os.getcwd()
             dhist = self.shell.user_ns['_dh']
@@ -3439,7 +3439,7 @@ Defaulting color scheme to 'NoColor'"""
 
         # Shorthands
         shell = self.shell
-        oc = shell.outputcache
+        oc = shell.displayhook
         meta = shell.meta
         # dstore is a data store kept in the instance metadata bag to track any
         # changes we make, so we can undo them later.
diff --git a/IPython/core/prefilter.py b/IPython/core/prefilter.py
index a7bd9c6..3c11767 100755
--- a/IPython/core/prefilter.py
+++ b/IPython/core/prefilter.py
@@ -405,7 +405,7 @@ class PrefilterManager(Configurable):
         normal_handler = self.get_handler_by_name('normal')
         if not stripped:
             if not continue_prompt:
-                self.shell.outputcache.prompt_count -= 1
+                self.shell.displayhook.prompt_count -= 1
 
             return normal_handler.handle(line_info)
 
@@ -916,7 +916,7 @@ class AutoHandler(PrefilterHandler):
                     newcmd = '%s(%s)' % (ifun.rstrip(), the_rest)
 
         if auto_rewrite:
-            rw = self.shell.outputcache.prompt1.auto_rewrite() + newcmd
+            rw = self.shell.displayhook.prompt1.auto_rewrite() + newcmd
             
             try:
                 # plain ascii works better w/ pyreadline, on some machines, so
diff --git a/IPython/core/prompts.py b/IPython/core/prompts.py
index 14231c8..3cfba55 100644
--- a/IPython/core/prompts.py
+++ b/IPython/core/prompts.py
@@ -1,19 +1,24 @@
 # -*- coding: utf-8 -*-
-"""
-Classes for handling input/output prompts.
+"""Classes for handling input/output prompts.
+
+Authors:
+
+* Fernando Perez
+* Brian Granger
 """
 
-#*****************************************************************************
-#       Copyright (C) 2008-2009 The IPython Development Team
+#-----------------------------------------------------------------------------
+#       Copyright (C) 2008-2010 The IPython Development Team
 #       Copyright (C) 2001-2007 Fernando Perez <fperez@colorado.edu>
 #
 #  Distributed under the terms of the BSD License.  The full license is in
 #  the file COPYING, distributed as part of this software.
-#*****************************************************************************
+#-----------------------------------------------------------------------------
 
-#****************************************************************************
+#-----------------------------------------------------------------------------
+# Imports
+#-----------------------------------------------------------------------------
 
-import __builtin__
 import os
 import re
 import socket
@@ -21,14 +26,11 @@ import sys
 
 from IPython.core import release
 from IPython.external.Itpl import ItplNS
-from IPython.core.error import TryNext
 from IPython.utils import coloransi
-import IPython.utils.generics
-from IPython.utils.warn import warn
-import IPython.utils.io
 
-#****************************************************************************
-#Color schemes for Prompts.
+#-----------------------------------------------------------------------------
+# Color schemes for prompts
+#-----------------------------------------------------------------------------
 
 PromptColors = coloransi.ColorSchemeTable()
 InputColors = coloransi.InputTermColors  # just a shorthand
@@ -76,6 +78,9 @@ PromptColors.add_scheme(__PColLightBG)
 del Colors,InputColors
 
 #-----------------------------------------------------------------------------
+# Utilities
+#-----------------------------------------------------------------------------
+
 def multiple_replace(dict, text):
     """ Replace in 'text' all occurences of any key in the given
     dictionary by its corresponding value.  Returns the new string."""
@@ -90,6 +95,7 @@ def multiple_replace(dict, text):
 
 #-----------------------------------------------------------------------------
 # Special characters that can be used in prompt templates, mainly bash-like
+#-----------------------------------------------------------------------------
 
 # If $HOME isn't defined (Windows), make it an absurd string so that it can
 # never be expanded out into '~'.  Basically anything which can never be a
@@ -201,6 +207,9 @@ for _color in dir(input_colors):
 prompt_specials = prompt_specials_nocolor
 
 #-----------------------------------------------------------------------------
+# More utilities
+#-----------------------------------------------------------------------------
+
 def str_safe(arg):
     """Convert to a string, without ever raising an exception.
 
@@ -221,6 +230,10 @@ def str_safe(arg):
         #raise  # dbg
     return out
 
+#-----------------------------------------------------------------------------
+# Prompt classes
+#-----------------------------------------------------------------------------
+
 class BasePrompt(object):
     """Interactive prompt similar to Mathematica's."""
 
@@ -234,7 +247,7 @@ class BasePrompt(object):
     p_template = property(_get_p_template,_set_p_template,
                           doc='Template for prompt string creation')
 
-    def __init__(self,cache,sep,prompt,pad_left=False):
+    def __init__(self, cache, sep, prompt, pad_left=False):
 
         # Hack: we access information about the primary prompt through the
         # cache argument.  We need this, because we want the secondary prompt
@@ -267,17 +280,17 @@ class BasePrompt(object):
             self.p_str = ItplNS('%s%s%s' %
                                 ('${self.sep}${self.col_p}',
                                  multiple_replace(prompt_specials, self.p_template),
-                                 '${self.col_norm}'),self.cache.user_ns,loc)
+                                 '${self.col_norm}'),self.cache.shell.user_ns,loc)
     
             self.p_str_nocolor = ItplNS(multiple_replace(prompt_specials_nocolor,
                                                          self.p_template),
-                                        self.cache.user_ns,loc)
+                                        self.cache.shell.user_ns,loc)
         except:
             print "Illegal prompt template (check $ usage!):",self.p_template
             self.p_str = self.p_template
             self.p_str_nocolor = self.p_template
 
-    def write(self,msg):  # dbg
+    def write(self, msg):
         sys.stdout.write(msg)
         return ''
 
@@ -301,7 +314,7 @@ class BasePrompt(object):
 
     # these path filters are put in as methods so that we can control the
     # namespace where the prompt strings get evaluated
-    def cwd_filt(self,depth):
+    def cwd_filt(self, depth):
         """Return the last depth elements of the current working directory.
 
         $HOME is always replaced with '~'.
@@ -314,7 +327,7 @@ class BasePrompt(object):
         else:
             return os.sep
 
-    def cwd_filt2(self,depth):
+    def cwd_filt2(self, depth):
         """Return the last depth elements of the current working directory.
 
         $HOME is always replaced with '~'.
@@ -341,11 +354,12 @@ class BasePrompt(object):
 
         return bool(self.p_template)
 
+
 class Prompt1(BasePrompt):
     """Input interactive prompt similar to Mathematica's."""
 
-    def __init__(self,cache,sep='\n',prompt='In [\\#]: ',pad_left=True):
-        BasePrompt.__init__(self,cache,sep,prompt,pad_left)
+    def __init__(self, cache, sep='\n', prompt='In [\\#]: ', pad_left=True):
+        BasePrompt.__init__(self, cache, sep, prompt, pad_left)
 
     def set_colors(self):
         self.set_p_str()
@@ -373,11 +387,12 @@ class Prompt1(BasePrompt):
         return '%s%s>%s%s' % (self.col_p_ni,'-'*(len(curr)-nrspaces-1),
                               ' '*nrspaces,self.col_norm_ni)
 
+
 class PromptOut(BasePrompt):
     """Output interactive prompt similar to Mathematica's."""
 
-    def __init__(self,cache,sep='',prompt='Out[\\#]: ',pad_left=True):
-        BasePrompt.__init__(self,cache,sep,prompt,pad_left)
+    def __init__(self, cache, sep='', prompt='Out[\\#]: ', pad_left=True):
+        BasePrompt.__init__(self, cache, sep, prompt, pad_left)
         if not self.p_template:
             self.__str__ = lambda: ''
 
@@ -388,10 +403,11 @@ class PromptOut(BasePrompt):
         self.col_num = Colors.out_number
         self.col_norm = Colors.normal
 
+
 class Prompt2(BasePrompt):
     """Interactive continuation prompt."""
     
-    def __init__(self,cache,prompt='   .\\D.: ',pad_left=True):
+    def __init__(self, cache, prompt='   .\\D.: ', pad_left=True):
         self.cache = cache
         self.p_template = prompt
         self.pad_left = pad_left
@@ -404,10 +420,10 @@ class Prompt2(BasePrompt):
                             ('${self.col_p2}',
                              multiple_replace(prompt_specials, self.p_template),
                              '$self.col_norm'),
-                            self.cache.user_ns,loc)
+                            self.cache.shell.user_ns,loc)
         self.p_str_nocolor = ItplNS(multiple_replace(prompt_specials_nocolor,
                                                      self.p_template),
-                                    self.cache.user_ns,loc)
+                                    self.cache.shell.user_ns,loc)
 
     def set_colors(self):
         self.set_p_str()
@@ -419,221 +435,3 @@ class Prompt2(BasePrompt):
         self.col_p = Colors.out_prompt
         self.col_num = Colors.out_number
 
-
-#-----------------------------------------------------------------------------
-class CachedOutput:
-    """Class for printing output from calculations while keeping a cache of
-    reults. It dynamically creates global variables prefixed with _ which
-    contain these results.
-
-    Meant to be used as a sys.displayhook replacement, providing numbered
-    prompts and cache services.
-
-    Initialize with initial and final values for cache counter (this defines
-    the maximum size of the cache."""
-
-    def __init__(self,shell,cache_size,Pprint,
-                 colors='NoColor',input_sep='\n',
-                 output_sep='\n',output_sep2='',
-                 ps1 = None, ps2 = None,ps_out = None,pad_left=True):
-
-        cache_size_min = 3
-        if cache_size <= 0:
-            self.do_full_cache = 0
-            cache_size = 0
-        elif cache_size < cache_size_min:
-            self.do_full_cache = 0
-            cache_size = 0
-            warn('caching was disabled (min value for cache size is %s).' %
-                 cache_size_min,level=3)
-        else:
-            self.do_full_cache = 1
-
-        self.cache_size = cache_size
-        self.input_sep = input_sep
-
-        # we need a reference to the user-level namespace
-        self.shell = shell
-        self.user_ns = shell.user_ns
-        # and to the user's input
-        self.input_hist = shell.input_hist
-        # and to the user's logger, for logging output
-        self.logger = shell.logger
-
-        # Set input prompt strings and colors
-        if cache_size == 0:
-            if ps1.find('%n') > -1 or ps1.find(r'\#') > -1 \
-                   or ps1.find(r'\N') > -1:
-                ps1 = '>>> '
-            if ps2.find('%n') > -1 or ps2.find(r'\#') > -1 \
-                   or ps2.find(r'\N') > -1:
-                ps2 = '... '
-        self.ps1_str = self._set_prompt_str(ps1,'In [\\#]: ','>>> ')
-        self.ps2_str = self._set_prompt_str(ps2,'   .\\D.: ','... ')
-        self.ps_out_str = self._set_prompt_str(ps_out,'Out[\\#]: ','')
-
-        self.color_table = PromptColors
-        self.prompt1 = Prompt1(self,sep=input_sep,prompt=self.ps1_str,
-                               pad_left=pad_left)
-        self.prompt2 = Prompt2(self,prompt=self.ps2_str,pad_left=pad_left)
-        self.prompt_out = PromptOut(self,sep='',prompt=self.ps_out_str,
-                                    pad_left=pad_left)
-        self.set_colors(colors)
-
-        # other more normal stuff
-        # b/c each call to the In[] prompt raises it by 1, even the first.
-        self.prompt_count = 0
-        # Store the last prompt string each time, we need it for aligning
-        # continuation and auto-rewrite prompts
-        self.last_prompt = ''
-        self.Pprint = Pprint
-        self.output_sep = output_sep
-        self.output_sep2 = output_sep2
-        self._,self.__,self.___ = '','',''
-        self.pprint_types = map(type,[(),[],{}])
-        
-        # these are deliberately global:
-        to_user_ns = {'_':self._,'__':self.__,'___':self.___}
-        self.user_ns.update(to_user_ns)
-
-    def _set_prompt_str(self,p_str,cache_def,no_cache_def):
-        if p_str is None:
-            if self.do_full_cache:
-                return cache_def
-            else:
-                return no_cache_def
-        else:
-            return p_str
-                
-    def set_colors(self,colors):
-        """Set the active color scheme and configure colors for the three
-        prompt subsystems."""
-
-        # FIXME: the prompt_specials global should be gobbled inside this
-        # class instead.  Do it when cleaning up the whole 3-prompt system.
-        global prompt_specials
-        if colors.lower()=='nocolor':
-            prompt_specials = prompt_specials_nocolor
-        else:
-            prompt_specials = prompt_specials_color
-        
-        self.color_table.set_active_scheme(colors)
-        self.prompt1.set_colors()
-        self.prompt2.set_colors()
-        self.prompt_out.set_colors()
-
-    def __call__(self,arg=None):
-        """Printing with history cache management.
-        
-        This is invoked everytime the interpreter needs to print, and is
-        activated by setting the variable sys.displayhook to it."""
-
-        # If something injected a '_' variable in __builtin__, delete
-        # ipython's automatic one so we don't clobber that.  gettext() in
-        # particular uses _, so we need to stay away from it.
-        if '_' in __builtin__.__dict__:
-            try:
-                del self.user_ns['_']
-            except KeyError:
-                pass
-        if arg is not None:
-            cout_write = IPython.utils.io.Term.cout.write # fast lookup
-            # first handle the cache and counters
-
-            # do not print output if input ends in ';'
-            try:
-                if self.input_hist[self.prompt_count].endswith(';\n'):
-                    return
-            except IndexError:
-                # some uses of ipshellembed may fail here
-                pass
-            # don't use print, puts an extra space
-            cout_write(self.output_sep)
-            outprompt = self.shell.hooks.generate_output_prompt()
-            # print "Got prompt: ", outprompt
-            if self.do_full_cache:
-                cout_write(outprompt)
-
-            # and now call a possibly user-defined print mechanism. Note that
-            # self.display typically prints as a side-effect, we don't do any
-            # printing to stdout here.
-            try:
-                manipulated_val = self.display(arg)
-            except TypeError:
-                # If the user's display hook didn't return a string we can
-                # print, we're done.  Happens commonly if they return None
-                cout_write('\n')
-                return
-            
-            # user display hooks can change the variable to be stored in
-            # output history
-            if manipulated_val is not None:
-                arg = manipulated_val
-
-            # avoid recursive reference when displaying _oh/Out
-            if arg is not self.user_ns['_oh']:
-                self.update(arg)
-
-            if self.logger.log_output:
-                self.logger.log_write(repr(arg),'output')
-            cout_write(self.output_sep2)
-            IPython.utils.io.Term.cout.flush()
-
-    def _display(self,arg):
-        """Default printer method, uses pprint.
-
-        Do ip.set_hook("result_display", my_displayhook) for custom result
-        display, e.g. when your own objects need special formatting.
-        """
-        try:
-            return IPython.utils.generics.result_display(arg)
-        except TryNext:            
-            return self.shell.hooks.result_display(arg)
-
-    # Assign the default display method:
-    display = _display
-
-    def update(self,arg):
-        #print '***cache_count', self.cache_count # dbg
-        if len(self.user_ns['_oh']) >= self.cache_size and self.do_full_cache:
-            warn('Output cache limit (currently '+
-                  `self.cache_size`+' entries) hit.\n'
-                 'Flushing cache and resetting history counter...\n'
-                 'The only history variables available will be _,__,___ and _1\n'
-                 'with the current result.')
-
-            self.flush()
-        # Don't overwrite '_' and friends if '_' is in __builtin__ (otherwise
-        # we cause buggy behavior for things like gettext).
-        if '_' not in __builtin__.__dict__:
-            self.___ = self.__
-            self.__ = self._
-            self._ = arg
-            self.user_ns.update({'_':self._,'__':self.__,'___':self.___})
-            
-        # hackish access to top-level  namespace to create _1,_2... dynamically
-        to_main = {}
-        if self.do_full_cache:
-            new_result = '_'+`self.prompt_count`
-            to_main[new_result] = arg
-            self.user_ns.update(to_main)
-            self.user_ns['_oh'][self.prompt_count] = arg
-
-    def flush(self):
-        if not self.do_full_cache:
-            raise ValueError,"You shouldn't have reached the cache flush "\
-                  "if full caching is not enabled!"
-        # delete auto-generated vars from global namespace
-        
-        for n in range(1,self.prompt_count + 1):
-            key = '_'+`n`
-            try:
-                del self.user_ns[key]
-            except: pass
-        self.user_ns['_oh'].clear()
-        
-        if '_' not in __builtin__.__dict__:
-            self.user_ns.update({'_':None,'__':None, '___':None})
-        import gc
-        gc.collect() # xxx needed?
-
diff --git a/IPython/core/tests/test_run.py b/IPython/core/tests/test_run.py
index 35d49ac..12f634f 100644
--- a/IPython/core/tests/test_run.py
+++ b/IPython/core/tests/test_run.py
@@ -122,7 +122,7 @@ class TestMagicRunPass(tt.TempFileMixin):
         """Test that prompts correctly generate after %run"""
         self.run_tmpfile()
         _ip = get_ipython()
-        p2 = str(_ip.outputcache.prompt2).strip()
+        p2 = str(_ip.displayhook.prompt2).strip()
         nt.assert_equals(p2[:3], '...')
 
 
diff --git a/IPython/frontend/terminal/interactiveshell.py b/IPython/frontend/terminal/interactiveshell.py
index ec10d8c..50b57ac 100644
--- a/IPython/frontend/terminal/interactiveshell.py
+++ b/IPython/frontend/terminal/interactiveshell.py
@@ -236,7 +236,7 @@ class TerminalInteractiveShell(InteractiveShell):
                     self.write('\nKeyboardInterrupt\n')
                     self.resetbuffer()
                     # keep cache in sync with the prompt counter:
-                    self.outputcache.prompt_count -= 1
+                    self.displayhook.prompt_count -= 1
     
                     if self.autoindent:
                         self.indent_current_nsp = 0
diff --git a/IPython/testing/iptest.py b/IPython/testing/iptest.py
index a39e53b..db139b1 100644
--- a/IPython/testing/iptest.py
+++ b/IPython/testing/iptest.py
@@ -250,7 +250,7 @@ class IPTester(object):
             return os.system(' '.join(self.call_args))
     else:
         def _run_cmd(self):
-            #print >> sys.stderr, '*** CMD:', ' '.join(self.call_args) # dbg
+            # print >> sys.stderr, '*** CMD:', ' '.join(self.call_args) # dbg
             subp = subprocess.Popen(self.call_args)
             self.pids.append(subp.pid)
             # If this fails, the pid will be left in self.pids and cleaned up
diff --git a/IPython/utils/generics.py b/IPython/utils/generics.py
index 2087b50..4fcc32b 100644
--- a/IPython/utils/generics.py
+++ b/IPython/utils/generics.py
@@ -33,12 +33,6 @@ from IPython.external.simplegeneric import generic
 
 
 @generic
-def result_display(result):
-    """Print the result of computation."""
-    raise TryNext
-
-
-@generic
 def inspect_object(obj):
     """Called when you do obj?"""
     raise TryNext
diff --git a/IPython/utils/text.py b/IPython/utils/text.py
index 169a0e4..45ec602 100644
--- a/IPython/utils/text.py
+++ b/IPython/utils/text.py
@@ -23,7 +23,6 @@ import types
 
 from IPython.external.path import path
 
-from IPython.utils.generics import result_display
 from IPython.utils.io import nlprint
 from IPython.utils.data import flatten
 
@@ -94,14 +93,17 @@ class LSString(str):
 
     p = paths = property(get_paths)
 
+# FIXME: We need to reimplement type specific displayhook and then add this
+# back as a custom printer. This should also be moved outside utils into the
+# core.
 
-def print_lsstring(arg):
-    """ Prettier (non-repr-like) and more informative printer for LSString """
-    print "LSString (.p, .n, .l, .s available). Value:"
-    print arg
-
-
-print_lsstring = result_display.when_type(LSString)(print_lsstring)
+# def print_lsstring(arg):
+#     """ Prettier (non-repr-like) and more informative printer for LSString """
+#     print "LSString (.p, .n, .l, .s available). Value:"
+#     print arg
+# 
+# 
+# print_lsstring = result_display.when_type(LSString)(print_lsstring)
 
 
 class SList(list):
@@ -248,17 +250,20 @@ class SList(list):
         return SList([t[1] for t in dsu])
 
 
-def print_slist(arg):
-    """ Prettier (non-repr-like) and more informative printer for SList """
-    print "SList (.p, .n, .l, .s, .grep(), .fields(), sort() available):"
-    if hasattr(arg,  'hideonce') and arg.hideonce:
-        arg.hideonce = False
-        return
-
-    nlprint(arg)
-
-
-print_slist = result_display.when_type(SList)(print_slist)
+# FIXME: We need to reimplement type specific displayhook and then add this
+# back as a custom printer. This should also be moved outside utils into the
+# core.
+
+# def print_slist(arg):
+#     """ Prettier (non-repr-like) and more informative printer for SList """
+#     print "SList (.p, .n, .l, .s, .grep(), .fields(), sort() available):"
+#     if hasattr(arg,  'hideonce') and arg.hideonce:
+#         arg.hideonce = False
+#         return
+# 
+#     nlprint(arg)
+# 
+# print_slist = result_display.when_type(SList)(print_slist)
 
 
 def esc_quotes(strng):
diff --git a/IPython/zmq/zmqshell.py b/IPython/zmq/zmqshell.py
index 62ba5d0..061bc2a 100644
--- a/IPython/zmq/zmqshell.py
+++ b/IPython/zmq/zmqshell.py
@@ -17,7 +17,7 @@ class ZMQInteractiveShell(InteractiveShell):
         for line in p.stderr.read().split('\n'):
             if len(line) > 0:
                 print line
-        return p.wait()
+        p.wait()
 
     def init_io(self):
         # This will just use sys.stdout and sys.stderr. If you want to