This post does not relate to design of JBossCache. So I will move it to user forum shortly.
To answer some of you questions:
1. Tree cache structure has implication on concurrency and locking. Currently the isolation level/locking is applied on per node basis. So if you have finer node, the concurrency can be better (but more cache overhead).
2. To limit the memory, you can configure different region of the data such that /X and /X/Y can be different regions, for example.