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After researching various caching options, I decided to go with the Wordpress W3 Total Cache plugins and PHP APC Cache.
I am running Wordpress 3.1 and have multisite enabled. I have installed W3 Total Cache on my main website. My understanding is that W3 Total Cache works in part by adding a lot of rules to your web root .htaccess access files. It is also my understanding that rules applied to your web root's .htaccess file will be applied to all your multisite websites.
(In other words, enabling gzip compression in mydomain.tdl/.htaccess will enable gzip compression for blog1.mydomain.tdl, blog2.mydomain.tdl, etc.)
Do I also need to enable W3 Total Cache for all sites?