Looks like I grabbed the incorrect version of memcache for php. You must grab the correct memcache dll file for the php version you are using. I found the correct download here:
http://windows.php.net/downloads/pecl/snaps/memcache/3.0.6/php_memcache-3.0.6-5.4-ts-vc9-x86.zip
It has the correct php version, 5.4 and its thread safe. Once I downloaded it, extracted the dll and put into php extension folder and restarted xampp/apache, it now works.