I love you. And I mean it from the bottom of my heart. On October, 22nd, I upgraded to moodle 1.8.3+. Take a look at the number of queries before and after...
Another hint is to turn any engine og MySQL off, you won't need, especially InnoDB to save memory.
We use lighttpd instead of apache - this saves much memory - but no one seems to have tested this on high load environments. I've got 30% more performance since using lighttpd/fastCGI.
I am wondering what your max concurrent users are when using lighttpd/fastcgi. Perhaps a good option for us. Whan you speak of performance what do you mean exactly, faster response time on pages, or less load on the server?