Your config looks proper except that

ny1 { 

location / { 

proxy_pass http://backend; } 

}

should perhaps be

server { 

location / { 

proxy_set_header Host $host;

proxy_pass http://backend;

} 

}

instead.

Hey Kamal!
What would I put for proxy_pass though? Why is http://backend in the tutorial? o.O

proxy_pass http://backend instructs nginx to proxy to the upstream that is called backend which you have defined in the first 5 lines.

It should also be

upstream backend { 

    server 192.241.143.207; 

    server 162.243.27.154; 

    server 162.243.133.133; 

} 

instead of

upstream backend { 

ny1 192.241.143.207; 

ny2 162.243.27.154; 

sf1 162.243.133.133; 

} 

OH! Thanks. I will let you know how it goes.
I gave you a twitter shout out :)

I'm getting this:
root@load-balancer:~# service nginx reload
Reloading nginx configuration: nginx: [emerg] unknown directive "ny1" in /etc/nginx/sites-enabled/default:2
nginx: configuration file /etc/nginx/nginx.conf test failed
With this:
upstream backend {
ny1 192.241.143.207;
ny2 162.243.27.154;
sf1 162.243.133.133;
}

ny1 {
location / {
proxy_set_header Host $host;
proxy_pass http://backend;
}
}

ny2 {
location / {
proxy_set_header Host $host;
proxy_pass http://backend;
}
}

sf1 {
location / {
proxy_set_header Host $host;
proxy_pass http://backend;
}
}
Do I need anything else other than that in my "default" file? It's all I got.

Oh wait! I'll take a gamble that ny1,ny2,sf1 needs to be server as in the tutorial. I thought it was placeholder.

You don't need all of these server blocks. You need only one upstream block and server block.

Nope:
upstream backend {
ny1 192.241.143.207;
ny2 162.243.27.154;
sf1 162.243.133.133;
}

server {
location / {
proxy_set_header Host $host;
proxy_pass http://backend;
}
}

You able to correct me? :/
New to NGINX kinda. :D I like experimenting.

Try this config instead: https://p.kk7.me/geruxucohu.nginx

Also, it's worth mentioning that this config should be on a separate nginx load balancer so you will have 4 servers in total.

I have 4 servers in total. And I sussed it out!
upstream backend {
server 192.241.143.207;
server 162.243.27.154;
server 162.243.133.133;
}

server {
location / {
proxy_set_header Host $host;
proxy_pass http://backend;
}
}

Sweet! :]

Another thing now... how do I move ALL MySQL database records from my server1 to load-balancer(just so it's all organised how I love it) and remove it from server1,2,3? Thanks for the help so far!

Take a look at https://www.digitalocean.com/community/articles/how-to-migrate-a-mysql-database-between-two-servers

You're very fast. IT'S OVAR 9000/10 from me. =]

That broke database connections,
http://stackoverflow.com/questions/19213973/pdo-cannot-connect-to-remote-mysql

Did you update your websites with the new location of the MySQL server?

Yes, updated some of them, and some still doing. :)
I managed to fix the pdo thing, I didn't have mysql installed so I had to run:
sudo apt-get install php5-mysql
to get the drivers.