Dont give up so fast. Error msg. could be because of 1 plugin, 1 js file – everything else might work great.
But I would disable everything about minification until you know cache works – and then take baby steps while testing, especially JS stuff. If a plugin has a brain and only loads when in use, only on front page or something like that, you might want to exclude it. Or make use of template feature of W3TC.
Actually before thinking of caching, before activating W3TC, you should check all plugins, how much CSS and JS do they load? Check with Firebug Net tab or similar tool, source code. May be even check database queries or if in to a little php force some plugins to only load when they are used. Junk plugins should be replaced. Make site fast and effective with no W3TC. Not much point in letting W3TC or other cache attempt to hide horrible setup. Would be like loading not optimized images.
What to use and do depend a lot on server so may be they have some info on what works best? If on HostGator they will tell you not to use object, database caching – as probably goes for most shared servers. Those 2 also part of bad guides that forget to state under which conditions this or that feature is relevant.
When nothing more to do you can look at CSS and JS files, mainly to limit http requests. CSS should not be so difficult, JS can be. Will not change with other minifying plugin. Your current problem is likely nothing special.
Dont forget to test JS minification in details. Start up js error console and test in all browsers.
