We have recently added nginx as a high performance frontend to our web servers. It processes all incoming request from site visitors and passes these onto the webserver (Apache and iiS) so it understands all directives and rewrite rules as per normal. The use of nginx in this fashion improves website page loads and the number of available concurrent connections that can be sustained on busy websites.
For best results we recommend avoiding use of .htacess files and their directives as these kill individual website performance as the web server processes the directives for every single request which is very inefficient.