jshellhaas,
Thanks for you post!
1) Eventually you will zoom in to a point that you cannot zoom in any more. This is to be expected as it does not make sense to keep zooming in to extremely small area.
2) To use the image cache just set the property on the map such as Map.ImageCacheDirectory = “\Cache” and make sure that the Cache director exists under the folder where you have the page with the map control. Just be setting this proeprty it will be enabled. If you generate a few maps you can see the image files being generated in this directory. You can remove the HTTP handler definition in the Web.Config as it will not be used when the image cache feature is enabled.
ThinkGeo Support