From http://docs.joomla.org/Nginx

nginxconf.conf

server {
        listen 80;
        server_name YOUR_DOMAIN;
        server_name_in_redirect off;

        access_log /var/log/nginx/localhost.access_log main;
        error_log /var/log/nginx/localhost.error_log info;

        root PATH_ON_SERVER;
        index index.php index.html index.htm default.html default.htm;
        # Support Clean (aka Search Engine Friendly) URLs
        location / {
                try_files $uri $uri/ /index.php?$args;
        }

        # deny running scripts inside writable directories
        location ~* /(images|cache|media|logs|tmp)/.*\.(php|pl|py|jsp|asp|sh|cgi)$ {
                return 403;
                error_page 403 /403_error.html;
        }

        location ~ \.php$ {
            fastcgi_pass  127.0.0.1:9000;
            fastcgi_index index.php;
            include fastcgi_params;
            fastcgi_param SCRIPT_FILENAME $document_root$fastcgi_script_name;
            include /etc/nginx/fastcgi.conf;
        }

        # caching of files 
        location ~* \.(ico|pdf|flv)$ {
                expires 1y;
        }

        location ~* \.(js|css|png|jpg|jpeg|gif|swf|xml|txt)$ {
                expires 14d;
        }

}