<p>Can someone explain this in a practical way?  Sample represents usage for one, low-traffic Rails site using Nginx and 3 Mongrel clusters.  I ask because I am aiming to learn about page caching, wondering if these figures have significant meaning to that process.  Thank you.  Great site!</p>

<pre><code>me@vps:~$ free -m
                   total       used       free     shared    buffers     cached
Mem:           512        506            6             0          15           103
-/+ buffers/cache:       387        124
Swap:         1023        113        910
</code></pre>

by my reading of this, you have used almost all your memory, have 6 M free, and are going into about 10% of your swap. A more useful tools is to use top or perhaps ps to see how much each of your individual mongrels are using in RAM. Because you're going into swap, you're probably getting more slowdowns. you might find having only 2 mongrels rather than 3 might actually respond faster because it likely wouldn't go into swap memory.
Page caching will for sure help a tonne on response time, so if your pages are cachable (eg, they don't have content that is unique to the individual user) I would say for sure check it out