Well, at a quick glance, my advanced-cache.php appears identical to the one the OP posted. The only thing I think I need in the wp-config.php is: define( 'WP_CACHE', true );, if I've read correctly.
I did try creating an .htacess file in the /wp-content/cache directory (there wasn't one generated automatically, should there have been?) and pasting some code in there (read it somewhere in plugin's support), but that didn't work so I deleted it. I have never touched the wp-root .htaccess file.
I haven't tried changing permissions yet, but don't think they're the problem.