I would recommend that the documentation for location matching is updated http://wiki.nginx.org/HttpCoreModule#location, explicitaly the example. It should contain a conventional strings besides the root '/' of the site:

location = / {
# matches the query / only.
[ configuration A ]
}
location / {
# matches any query, since all queries begin with /, but regular
# expressions and any longer conventional blocks will be
# matched first.
[ configuration B ]
}
location ^~ /images/ {
# matches any query beginning with /images/ and halts searching,
# so regular expressions will not be checked.
[ configuration C ]
}
location /media/ {
# matches any query beginning with /media/ and continues serching,
# so regular expressions will be checked. This will be matched only if
# regular expressions don't find a match
[ configuration D ]
}
location ~* \.(gif|jpg|jpeg)$ {
# matches any request ending in gif, jpg, or jpeg. However, all
# requests to the /images/ directory will be handled by
# Configuration C.
[ configuration E ]
}

I don't know who could I ask about this, but I think that it's important that all 4 explained steps in the documentation are covered by the example.