Ideal WP multisite server setup for up to 1000 sites?

I plan to host up to 1000 sites for a large non-profit. Each site could get quite a bit of traffic. What is the ideal setup?

VPS, *ngix, mem-cache etc?

Get a dedicated box with Nginx. That’ll go pretty far even before caching. It mostly depends on your traffic tho. Number of blogs matters a lot less, becasue I’ve seen a network with 10 blogs suck up a gig of RAM becasue of the hits it was getting.