I have similar questions. I just recently installed W3 Total Cache on my Multi site installation.
I originally activated it site wide, but then the settings page appeared on each blog and it seemed that each blog had to be configured separately. Also, there appeared to be a separate directory in my wp-content directory for each blog.
That definitely wasn’t what I wanted, so I deactivated it site wide and reactivated on just my main blog. Now of course it appears only my main blog is getting cached.
So it doesn’t appear that W3 Total Cache can do what I want it to do, which is to have one settings page that applies the same settings to every site in my installation, and of course not clutter my wp-content directory with a directory for each site.
