Tell Rails to use memcached. In production.rb (or staging.rb or...)

ActionController::Base.cache_store = :mem_cache_store, "ip_address_of_memcached_server",
                                                 {:namespace => "my_super_app"}

Specify the action you want to cache.

class PostsController < ApplicationController
   cache_action :posts_with_comments
   def posts_with_comments
     # shows all posts with comments
   end
end

Create a sweeper. (app/sweepers/post_comment_sweeper.rb)

class PostCommentSweeper < ActionController::Caching::Sweeper
  observe Post, Comment

  def after_save(rec)
    expire_cache_for(rec)
  end
  
  def after_destroy(rec)
    expire_cache_for(rec)
  end
  
  private
  def expire_cache_for(rec)
    expire_action(:controller => '/posts', :action => 'posts_with_comments')
  end
end

Note: the '/' in the controller name is important if you will invoke the sweeper from a nested controller. Without the '/' the cache_key will be wrong and rails will not find your data in the cache.

In each controller where we want our sweeper to be invoked if a observed model is saved or destroyed add the following line.

  cache_sweeper :post_comment_sweeper

Now our cached action will be expired everytime a Post or a Comment is saved or destroyed.
BUT: this will only happen if the save or destroy is called from within one of the controllers we added the cache_sweeper to.

The Sweeper will NOT be invoked if you do something like Post.last.save in script/console.
I dont know why it's implemented that way but that's how it is.

Now fire up your memcached instance and you're set!