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Nginx also has good http caching built in. I use it in a heavy load scenario and haven't had a single problem.

http://wiki.nginx.org/HttpProxyModule#proxy_cache

Maybe off topic but could you explain what the correct caching headers should be for a case like this?

Varnish is great, and it's something I'd recommend to many people in many cases, but most people don't have their caching headers set granularly enough to not get caught off-guard by unexpectedly stale content at some point.

Gotta be careful, but if you know what to expect, Varnish is great.

Yeah, "web developers" should really take a few minutes to learn HTTP.

Silly, how could they possibly find time to learn HTTP when they have to keep up with at least three blogs of mountebank victory bloggers in addition to learning the latest Drupal plugin?

In that case, you are already screwed. There are likely to be other proxies between you and some of your users.