elgg is not slow..am runnuing more than 3 sites in elgg but i didn't got any speed issue.

Are you on a shared server through your webhost? I would recommend upgrading to VMS or Cloud Server.

keep minimum mumber of plugins... if possible merge 3-4 plugins to one.. I have merged more than 5 plugins to my theme and using it as a single...

As sharon said elgg is not at all slow now...  i have been using Elgg for 2 yrs now... i started with 1.7.3 and now running 1.8.9 and i love it...

Satheesh, how we can merg pulgins? I am hearing this first time from you that on elgg we can merg plugins... May I know how?

@kiss, this is not the first time. I told you this a long time ago. You take what you want to overide and apply it to your theme instead of having Lee build you a special plugin. 

my 'cloud' server is fluctuating between being fast and pretty slow..
i think this is because it has 512MB RAM presently and that is not really enough to run apache and an email server side by sided (at least with the configuration i have loaded presently)... so when httpd service is reset, the site runs quickly then slows down after a while.. 
i believe processes are being shifted to the swap file, which leads to delays in the server responding to requests.
you can use the tools at www.pingdom.com to get some idea of where the delays are for your site. 

1.8.9 seems to have really sped up our highly modified beta site.

You can find a set of quite detailed articles about optimizing Elgg and Elgg performance here. Article that will be probably most usefull to you is here.

look to be that nginx is essential if you don't have a large server capacity available (RAM).

i see there is an nginx page here for elgg with rewrite rules.. though they don't look like they are nginx format.. hmm

use apc.php

Google settings for configuration options (eg. apc.stat = 1)