The project is mdcached, also available on Sourceforge.net. The intent for it is to be a high-performance cache engine similar to memcached with some extra features built-in (mostly, to have cached data "tagged" in order to more efficiently perform bulk operations). It is currently also a testbed for various strategies of multithreading within a network-intensive server.
The performance part is going very well so far. The following graphs shows a benchmark that consists of 90% GET and 10% SET operations on a cache filled with very small data items (~~100 bytes), under the following conditions:
- FreeBSD 8-CURRENT AMD64
- Local Unix socket connections to the server
- 2x Intel Xeon 5405 @ 2.0 GHz (8 cores total)
- 60 concurrent clients
Since both the server and the benchmark client are on the same system, best peformance is achieved with 4 threads assigned to the server.

Note that, theoretically, if the network stack could be made ideally SMP-aware and under ideal conditions on the network, the server could scale to >900,000 transactions/s.
I've given a short WIP talk about an early version of mdcached on BSDCan 2008, and I have written some papers about some aspects of it but the most important one (from the performance aspect) is waiting publication so I'll also wait before linking to it.
The design of mdcached is centered around dividing as many tasks as possible into reentrant pieces and avoiding malloc()s as much as possible (as opposed to memcached it uses the system malloc()). The data store is organized into two stages - a hash and a binary tree, reducing the access times significantly.
Currently, mdcached implements most of the features found in memcached, but the plans for it are somewhat bigger and more complex. It is not protocol-compatible with memcached, and probably never will be since the protocol is one notable part of why it's so speedy.
#1 Re: mdcached
Glad to see someone trying to advance the state of the art! How well does it perform versus memcached?
BTW: I think you could get some good exposure by publishing some benchmarks showing the differences between the two daemons for particular situations, as well as making the code more portable. As it stands, mdcached doesn't compile on my Linux or Mac OS X hosts.
#2 Re: mdcached
For "current" performance of memcached, this is probably useful: http://blogs.sun.com/shanti/entry/memcached_on_nehalem1 - note that this is on much better hardware.
As for portability - I usually test memcached on Ubuntu 8.10 - it should compile there, at least as i386.