Although I live in the city, love riding Cable Cars, and have passed by this many times, I had never visited the Cable Car Museum. I finally went in on a whim on my last cable car ride and I'm so glad I did. It's not a large museum, but it's also free admission. The actual working cables and spools are on display in a viewing area under the street and the museum answers all of the questions you have about how exactly the whole system works.
What's really incredible is that this "museum" is really the actual, working cable car garage. You are really just a visitor into the daily workings of the system, which makes it even more interesting.
Everything is very well explained and interesting. Since it's free and actually on the route of the cable cars, there's no reason not to go!