How to reduce DNS server latency

We currently used PowerDNS to host many zones using a MySQL server.

PowerDNS has been great to us. Some pros/cons:

Pros:

• Uses MySQL backend - other DB backends are available
• Updates to DB are published instantaneously
• Very friendly to MySQL Replication. We run two servers with replication and updates published instantaneously to both DBs (and dns queries are instant on both)
• SQL Scheme is very easy to use and manipulate. They provide a front-end which is hard to use for larger zones.

Cons:

• Upgrading major versions not very fun
• Lack of quality frontend means that you need to have a frontend to do the work. This is a good/bad thing.

Firstly, your comment to Chris S above clarifies (indeed, modifies) your original question considerably, and I hope you'll forgive me editing it into your original question.

Secondly, null records aren't permitted, as others have noted.

Thirdly, I think the way to do what you want is to declare local.example.com to be a proper subdomain:

local                       IN      NS      ns1.example.com
local                       IN      NS      ns2.example.com

listing the same two nameservers as you currently run for example.com (note: I don't know PowerDNS,so my entries above are in BIND format). Then on those nameservers (which I presume is this nameserver) you declare a zonefile for local.example.com which contains only the hosts you want to resolve, and no wildcard record.

So when people look up foo.example.com, assuming that's not listed, it'll match the existing wildcard record, and return 1.2.3.4 (or whatever). But when people look up foo.local.example.com, the nameserver records for local.example.com will be returned and a further recursion will take place, with your nameserver now looking at the zonefile for local.example.com, and saying (in the absence of a specific record for foo and a wildcard in local.example.com) "no, there is no such record".