Cavitation occurs when the pressure in a fluid drops below its vapor pressure, which can be analyzed using the cavitation number and Bernoulli's equation. The discussion emphasizes that there is no specific "cavitation velocity," as flow velocity is dependent on pressure conditions. The problem presented involves calculating flow speed given a vapor pressure of 23.3 hPa and a total pressure of 30 hPa. As flow velocity increases, static pressure decreases, and cavitation begins when static pressure equals vapor pressure. The conversation revolves around deriving the relationship between total pressure, static pressure, and flow velocity to determine the conditions for cavitation.