FS-Cache has been merged into the upcoming kernel 2.6.30. This allows for a generic caching interface in the kernel for other file systems. For example, you can use local hard disks to cache data accessed via NFS, AFS, or CD-Rom. Since these tend to be high-latency while the disks are low latency, it should provide for a nice speedup.
Of particular interest to me, I contacted maintainer David Howells who is a Redhat employee. I asked whether this infrastructure would help with large disk image files stored on NFS -- a common though not particularly efficient case for VMWare, Xen, KVM, etc. His exact response was "Quite feasible. As long as you have a local disk on which to cache the files."
I am quite happy as I run this setup at work for some production VMs since it allows for easy migration and backup without the complexity and cost of a SAN or cluster FS. I look forward to testing when 2.6.30 hits the stable tree.