I'm not as familiar with xcache as others might be, but if it really is chaching PHP pages the way it's supposed to, then it might be wise just to run it on the main site. Again, I don't know much about how it works, but if you have everything backed up, testing with the demo xcache off shouldn't be a problem. No reason why it would really need to be on, on the demo site. Because very few people will ever have access to it.
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