Your data frame's spatial reference (coordinate system) is different than the spatial reference required by the ArcGIS Online / Google Maps / Bing Maps tiling scheme. In order to overlay correctly with ArcGIS Online, Google Maps, or Bing Maps, your service must use the same spatial reference system. The spatial reference for the ArcGIS Online / Google Maps / Bing Maps tiling scheme is WGS 1984 Web Mercator (Auxiliary Sphere).
Your service, the tiles generated for the cache, and all selected capabilities will be in WGS 1984 Web Mercator (Auxiliary Sphere).
Solution
- Do nothing. Your service will use WGS 1984 Web Mercator (Auxiliary Sphere), and you will be able to overlay your service with other services, such as Bing Maps and Google Maps, using WGS 1984 Web Mercator (Auxiliary Sphere).
- If you will not be overlaying your service with ArcGIS Online, Google Maps, or Bing Maps, and you do not want your cached service to use WGS 1984 Web Mercator (Auxiliary Sphere) you must choose a tiling scheme that uses the same coordinate system as your data frame.
More information
All tiling schemes are associated with a spatial reference. Your data frame's spatial reference must match the spatial reference of your tiling scheme in order for tiles to be created.
Learn more about designing a map to overlay ArcGIS Online Google Maps and Bing Maps