I would highly recommend using a PHP accelerator when running PHP. At ez.no we use ionCube PHP accelerator (http://www.php-accelerator.co.uk/). We've experienced as much as 3x speed increase of eZ publish with an accelerator, but that's on fully cached sites where most of the overhead is in parsing the php files.
It means the template and view cache is on and you have already accessed the page (so the template and content output is already generated and will remain cached until you alter the content, clear the cache or the cache time expires).
PS! This thread is old, please use apc or eaccelerator over turck_mm for php acceleration, search it up on the net for more info on those.
PS2! Cache time applies only to view and cache-block cache, templates remains cached until you clear the template cache. (or until you change the template if you have developentmode enabled)
PS3! Take a look in the ini files in settings/ for a lot of comments on how things / settings can be altered, specially site.ini
