Read this and make sure it fits your use case. http://code.google.com/p/memcached/wiki/NewProgrammingFAQ#Why_is_memcached_not_recommended_for_sessions?_Everyone_does_it!

how many concurrent connections can memcached handle? how do i check
to see if in fact this is the bottleneck?

my memcached servers handle 8k connections each. I know of others that have blown this number away. listen_disabled_num tells you how many times you have hit your connection limit.

any other information regarding what settings / stat values to look
for would be helpful.

evictions and measuring hits vs. misses will tell you if your cache is being used efficiently. There are a ton of other stats. Use something like Cacti to graph the data. There are a couple of sets of templates already built for Cacti. See http://code.google.com/p/memcached/wiki/MonitorLinks

I'm considering using a memcaced server for each php app server but
then it wouldn't be a centralized situation.

I personally run memcached on every web server I have. Read http://code.google.com/p/memcached/wiki/NewConfiguringClient

--

Brian.
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http://brian.moonspot.net/

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