To be honest I've not understood it completely yet - and I even do understand how Node.js works, as a single thread using the event model. I just don't get how this is better than Apache, and how it scales horizontally if it's single-threaded.
I've found that this blog post by Tomislav Capan explains it very well:
Why The Hell Would I Use Node.js? A Case-by-Case Introduction
My interpretation of the gist of it, for Node 0.10, compared to Apache:
Note: most of the bad parts listed below will be improved with the upcoming version 0.12, something to keep aware of.
All server platforms have an upper limit. Node.js and Apache both will reach it at some point.
It depends on how you use it. Node.js is single threaded by default, but using the (relatively) new cluster module you can scale horizontally across multiple threads.
Furthermore, your database needs will also dictate how effective scaling is with node. For example, using MySQL with node.js won't get you nearly as much benefit as using MongoDB, because of the event driven nature of both MongoDB and node.js.
The following link has a lot of nice benchmarks of systems with different setups: http://www.techempower.com/benchmarks/
Node.js doesn't rank the highest but compared to other setups using nginx (no apache on their tables, but close enough) it does pretty well.
Again though, it highly depends on your needs. I believe if you are simply serving static websites it is recommend you stick with a more traditional stack. However people have done some amazing things with node.js for other needs: http://blog.caustik.com/2012/08/19/node-js-w1m-concurrent-connections/ (c10k? ha!)
Edit: It is worth mentioning that you really aren't 'replacing' just apache with node.js. You would be replacing apache AND php (in a typical lamp stack).
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