For the benefit of others than may stumble across this thread these are my findings :
We installed Zend Winenabler which caches PHP (effectively stores the compiled version and it tells you how much is cached which is nice), runs (by default) 25 instances of their own (more stable in multi-threaded enviornment) version of PHP. This made the platform much more stable and had a big effect of performance - highly recommended.
We also installed TurboIIS - not sure about the dynamic page caching as the docmentation is awful - our images were already fairly well optimised but it seemed to improve that and in general, it certainly helped. I might change to port80 http can'tremembername as it's a lot cheaper and probably does what we need it to do (compress html, xml, css, etc).
The biggest improvement was found by sorting our code out - we had some ridiculous looping problem with a 404. I used http analyser to find that problem. It's interesting to see what's going on at that level.
Also, running some of your SQL through the MySQL explain procedure is worth while - it doesn't take long and it throws up some things you may not have noticed.
Jack