you could also optimize all the plugin and core code, running it through something such as http://htmlcompressor.com/compressor.html on average ive chopped about 30% of most pages, however it does require a lot of work and time and future updates will require the same process, on the plus my server load no longer passes 2.0 and thats with arrowchat re-enabled.
another thing (as mentioned before) is apache, php and mysql tuning and a decent cache module, or a server upgrade. I recommend servint (who im with)