My site has a lot of dynamic content, so complete page caching doesn't help, nor does query caching or widget caching, so I had to figure out an alternative to all of this.

I installed X-Cache on the server to use as an opcode/bytecode cache (20% speedup) and to use as an extension of WP Cache's object cache mechanism. The latter I found to be immensely powerful.

I just surround ANY section of code in the template file (for example a menu) with the following snippet. This way I reduced page generation times from 350-500ms to 50ms.

  <?php
  if (false === ($top-menu = wp_cache_get('top-menu','menus'))) {
  	ob_start();
  	?>
  
  	<?php
  	$top-menu = ob_get_contents();
  	ob_end_clean();
  	wp_cache_set('top-menu', $top-menu, 'menus', 86400);
  }
  echo $top-menu;
  ?>

The ob_ family of functions are one of PHP's hidden gems.

I've been using W3 Total Cache for a while. No problems so far. It's great for me because I don't like tinkering on the backend for something like this. I could go in and make it better with this or one of the technically superior plugins, but this one was 99% there the moment I installed it.