Norway's biggest newspaper, www.vg.no, experienced increasing demands for hardware to keep their Squid-based solution fast enough to handle the daily surge in trafic around noon. Instead they turned to Linpro and Poul-Henning Kamp to find a more subtle solution. The result is Varnish.
The claims are they now serve up the 10.000 page requests/second using one box running Varnish instead of 12 boxes running Squid.
And yes; it's open source.
Link to story on Digi.no (in Norwegian, sorry!)