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Because Internet access rates are highly heterogeneous, many video content providers today make available different versions of the videos, with each version encoded at a different rate. Multiple video versions, however, require more server storage and may also dramatically impact cache performance in a traditional cache or in a CDN server. An alternative to versions is layered encoding, which can also provide multiple quality levels. Layered encoding requires less server storage capacity and may be more suitable for caching; but it typically increases transmission bandwidth due to encoding overhead. In this paper we compare video streaming of multiple versions with that of multiple layers in a caching environment. We examine caching and distribution strategies that use both versions and layers. Our analytical results indicate that mixed distribution/caching strategies provide the best overall performance.