Cat 5 or Cat5E?

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Cat 5e is the better of the two.

Realistically, if you go to your supplier and ask for Cat5, they're gonna give you Cat 5e.
 
Rocky posted a good document on the ins and outs of cabling. The simple answer to you question is that the Cat 5e can carry information at a higher rate of speed than the Cat 5.
 
The physical difference among twisted-pair cables is the number of twists per foot. All cables will "carry" data at any speed, but the receiving circuitry cannot separate the desired data from induced noise if the noise is present, and not in phase, on both conductors.

The receiving circuitry uses a technology called "common-mode noise rejection." Any electrical signal that arrives equally, and in phase (common mode), on both conductors is ignored, and only the out-of-phase signals (differential mode) are processed and passed on.

Induced noise on a twisted pair that strikes both conductors equally can be rejected. Because higher frequencies have shorter wavelengths, the tighter the twist rate, the higher the frequency of induced noise that can be rejected, which means a higher reliable data-transfer rate.
 
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