Hi Peter,
Performance is always important to the moodle developers, many of us manage large scale moodle installations where performance is vital!
quite a bit of work went into 1.9 regarding structure of code, and the number of queries to the database, but there is always room for improvement!
The biggest performance gain you can get is by tuning your webserver correctly (I think I saw in a previous post that your were using a windows server?) - unfortunately the number of people with large busy installations under windows is limited, and sometimes the easy solution is to throw more hardware at it..
If you are using
IIS - make sure you experiment with fastcgi - I've seen 50-60% performance gains in different areas with this, but you will need to a bit of testing with it first, as there aren't many people using it yet.
You should also investigate the use of a PHP Accelerator, although if you are using Windows, you may need to research and test this extensively - make sure you post your findings here!
As a larger institution, you may have internal developers who are able to contribute to the community by posting performance related improvements to the
Moodle Tracker for the development team to review. - (or if you have $$ but no developers... there are a few options there too....)
Dan