Varnish is primarily a caching reverse proxy, but also exhibits load-balancing and backend checking mechanisms and is very widely used on high traffic websites.
Varnish was designed from the ground to be a high performance reverse caching proxy and to not compete with the operating system on managing resources like memory. Most recent versions of Varnish support storing cache on memory or disk, and serving old content in case of backend fail (saint mode), among other features.
Varnish is written by Poul-Henning Kamp (PHK), and his Architect Notes are available about varnish design. PHK is also a well known FreeBSD kernel developer and mantainer.