Luke Carrier, founder and lead developer at CloudFlux recently wrote a how-to on compiling Nginx and PHP-FPM (can be found here). Nginx is well known for being a high-performance HTTP server and reverse proxy, in fact this very website is running on-top of Nginx. A few websites you might know that run Nginx are:
These sites show how Nginx can be deployed in many high traffic configurations, GitHub being well know for the use of RoR, Wordpress the use of PHP etc. Whether you are deploying PHP under FPM, RoR under Passenger, static files or data from memcached Nginx can outperform many other web servers.
The main advantage to using Nginx is it's event-driven (asynchronous) architecture, this means that alongside providing high-performance there is a small predictable memory footprint. All the features make the server a good performer in all environments from single VPS systems to web clusters.
Some features you'll probably love:
Modules for load balancing
Direct memcached integration
Simple proxy configuration
Ability to serve over 50,000 simultaneous connections
Low memory footprint
Clean simple to edit configuration files
Zero downtime configuration and binary updates
PCRE based rewrite rules
As you can see from their site Nginx as a server is highly regarded and recommended. I'd suggest taking a look, having a play and revealing what it can do for you.