If the start= is greater than the amount of data streamed on a cache hit, it re-fetches the video from the start.
IE /videocache/redtube/X0CBJF1ZA.flv?start=46098145
It sees this and then regrabs the video because it hasn't yet loaded to 46098145.
We are using Video Cache in a live environment, feel free to ask me for any stats etc that you would like. It has a drastic effect when there are a few thousand users hitting the cache with video hits :P
Also, if you used store url rewrites as well, videocache could cache the whole thing in one hit instead of double fetching the videos.
Any intentions to fix both of these issues? I consider them bugs as they don't work well in a live environment.
