From Meta, a Wikimedia project coordination wiki

Squid is a free, open source proxy cache server for web content.

Wikimedia uses, and MediaWiki developers recommend, the use of Squid caching proxy servers between the MediaWiki web server farms and the internet at MediaWiki sites as request/hit rates rise to the 100-200 per second range and the server farm reaches two to three machines. At Wikimedia the Squids typically serve about 75% of all hits and largely isolate the rest of the server farm from the effect of high profile events like Slashdotting. This reduces the load on both the PHP/web computers and the database server.

For non-Wikimedia situations, Squids are likely to be the best next step after moving from one server to a database server and two Apache web servers, perhaps going with a Squid instead of the second Apache.

For more information see: