My dev server is configured this way (IIS/mySql as well as SQL server) however I have selected a linux environment for production. It just runs better.
Having said that, how big is the pipe to your machine? It may be that you have traffic from other apps contributing to Moodle performance or lack of. You can tweak the network connection to provide improved throughput as well. This provided improved responsiveness to my users from the server. Google dr tcpip.
I used mmcache which required finding the right version for my release of php. I needed to run a cron job (there are any number of win cron utilities) to delete files every hour since it creates a lot of files on a heavily used system. Performance improvement was noticible but not stellar. No amount of fiddling has yielded any significant improvement from php. No such problem with Linux.
Don't allocate too much ram. Have a look at the task manager to determine how much is really used. You can use the task manager while users (you perhaps) access the server to help determine proper levels for memory usage etc. On my win server there was a huge processor spike whenever a page was served which I tracked back to IIS. Tuning IIS is another matter altogether which I won't go into here.
Tuning mysql is a fundamental installation task but don't overdo it. You may not need to allocate a lot of ram for a small database and not too many users. Do check the tables though and ensure that the database itself is in good health. Get phpmysql and take a good look. Ensure you install the missing pieces of mysql as well. The help files will tell you how to do this and phpmysql will show you what is missing.
Good hunting.