Check out these two videos of how digg and facebook work behind the scenes. (Wow, what a relief it is to use normal length URLs). Both definitely worth a watch.
They both praise memcached and mention that relational databases can only go so far.
One more thing worth mentioning is that digg was originally launched by hiring a programmer for ~2000$ and throwing it on shared hosting. So don't over-think it.
Oh, and myspace too.