Over at Connected Internet there’s a post about using WP-Cache along with Advanced PHP Cache with WordPress. An interesting look at how to use two caching systems together in order to avoid “the digg/slashdot effect”.
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I tried out this caching system. The problem with this is when you make minor changes to a post, or post and update, it sometimes won’t show the refreshed page. Might I suggest getting hosted on 1and1 instead?