HN user
That looks pretty nice. I'm always curious to see app developers make use of the caching opportunities in HTML5 so make the naysayers that claim the only way to have a great mobile experience is with a native app.
W3TC integrates with varnish and supports a number of backend web servers.
The permissions changes it asks for are because caching plugins need to create files on the server and most servers are either poorly configured or managment of groups:users is difficult, so temporarily requesting that users modify permissions so that the caching plugin can create the files for the user improves the installation experience via lowering the technical experience needed and the number of steps required.
I don't recommend suPHP in practice as it's quite slow, similar if not better security can be realized by using a reverse proxy, and then running PHP in fastcgi mode for example with a backend web server.