Here is what I want, When the locator passes through an area of the torus the opacity for that specific area to be turned On or Off. Sounds simple but can this be done ??

Yes. Do you need the turning to cache?

I don't know much about cache(sorry I m bit dumb in some departments :p) but certainly would like to if it helps in what I want. But how do you animate the opacity ?

A shader is for most parts a stateless entity, mathematicians have a better term for this but i forgot what it is. But the crux of it is that every piece of information that you pass to a shader needs to be present at the shading time. There is no past or future in shader, no knowledge of surroundings etc. It only has a very tiny tiny window of scope that the shader sees.

Now you can extend what the shader sees by connecting to the shader, most common such connection is a light, which your locator represents (lights don't have to do lighting, they can do anything a shader does, but since lights represent the standard space location for a renderer you usually use a light. It is then called a magic light because its not lighting anything).

Now movement is a bit of a problem as is storage. Storage is usually way to store info is to bake it down to a texture, vertex data or a voxel/pointcloud representation.l That the shader can then write to disk between renders if it needs some inter frame persistent lookup. The only problem you get with this is that now your renders cant be spread over to a farm (tough you could do this in 2 passes). So painting like say in photoshop is certainly possible, by baking each frames render to disk as a texture, using a simple distance to point calculation.

Stumped X_X