Natebot,
If you want to open a new thread with your question, and PM me the URL I would be happy to answer, though I may also include references to other past forum threads I have addressed your question in before too.
I will quickly say that I don’t make recommendations lightly, and I am taking them from our experiences of watching, analyzing, and consulting with thousands of hosting client over the years. A lot of my recommendations are generally geared at sites with large amounts of content and large traffic levels, ie: 10’s of thousands to millions of weblog(channel) entries, and 10’s of millions of EE powered page views per month. But in many cases the same examples can apply to almost any web site under pretty common situations. Over the years many of the actual performance tweets, changes and settings added into EE have come directly from working with the Dev team on identifying and targeting things we are seeing on sites hosted with EngineHosting. So if you have never hosted a web site with EngineHosting, I can guarantee you have gotten benefits from the clients that do. All I can say is in the end my recommendations are 100% from direct experience with big, busy EE sites.
There is a lot more to it than simply my quote above, you really need to understand the overall implications of over caching and how EE’s cache actually functions.
I look forward to your separate thread, if you still have questions.