The docs for Heroku and memecached do not cover Rails 3. So here is the short version:

In your Gemfile:

group :production do
  gem "memcache-client"
  gem 'memcached-northscale', :require => 'memcached'
end

In your environment.rb:

config.cache_store = :mem_cache_store, Memcached::Rails.new

Told you it was short.

Oh, and remember to install the memcached add on to your app:

heroku addons:add memcache:5mb

Told you it was short.

blogLater

Mikel