WordPress MU

We are looking at using WPMU to drive a large community site with upwards of 99 groups. Would it be better to go ahead and get a dedicated server, or would a shared server work just as well.

Also, are there any cacheing plugins like WP-Super Cache that work with WPMU to ease stress on the DB?

Start on a VPS at a place that also offers upgrades to dedicated.

Yes, super-cache works with MU.

Get lots of memory. :)