CDNs work best when the objects - images, scripts - are hosted on a completely different server. Hosting a CDN on the same box that holds your web site defeats the purpose, as the processor, RAM and bandwidth are already being used for the site, and even if the CDN is on a subdomain, your server is still being used.
Try WP Super Cache http://wordpress.org/extend/plugins/wp-super-cache/ with a Amazon Cloudfront CDN http://aws.amazon.com/cloudfront/ (You don't have to set up an S3 bucket; just use Cloudfront.)
Super Cache is less .htaccess intensive and more foolproof than W3TC. Follow WP Super Cache's instructions to add an .htaccess file to the cache folder for full browser caching.
Use http://gtmetrix.com/ to test site speed and caching.