Enables your blog to work properly with an nginx frontend static proxy cache. ASTRONOMICAL performance is yours!
It's super stable, very high performance and - another benefit - generically useful. Once you learn how nginx proxy caching works, you've got another tool in your toolbox you can deploy for any app, not just wordpress. Why learn the ins-and-outs of some of the heavyweight wordpress-only options, when nginx can probably handle all your caching (and even load-balancing) needs?
Also - there's something to be said for a caching layer that doesn't interfere with what it's caching. Separating the caching / load balancing layer from the apache backend gives you more deployment and tuning options.
Maybe, but probably not. It depends on the capabilities of your server(s) and the number of authenticated users you sustain at any given time. Definitely install an opcode cache. You might want to use wp-cache or some other object-only caching system as well.