<p>Does anyone have experience using the URL Rewrite Module (see <a href="http://blogs.iis.net/bills/archive/2008/07/09/new-iis7-releases-url-rewrite-application-routing-and-load-balancing-and-powershell-cmd-lets.aspx" rel="nofollow noreferrer">here</a>)?</p>

<p>Can it be used to do <a href="http://en.wikipedia.org/wiki/Reverse_proxy" rel="nofollow noreferrer">reverse proxy</a>?</p>

You're going to want to take a look at memcached. It's what a lot of huge (and well-scaled) sites used to handle problems just like this. If you have a few spare servers, you can easily set them up to keep most of your data in memory.
http://en.wikipedia.org/wiki/Memcached
http://www.danga.com/memcached/
http://www.socialtext.net/memcached/