I've been using lightty/lighttpd for about two years, and have had no problems. I occasionally have to restart lighttpd to regain some memory but other then that I love the config files and how minimal config is necessary to make everything work.
However the project seems kind of dead... compared to nginx. Nginx gets updated often. You hear lots of good things coming from Nginx.
Is it time to switch to nginx? Does nginx support xcache? Was xcache made just for lighttpd? In your experiences what do you recommend? (stay lightty OR move to Nginx)?