I’m a coauthor of a Rails plugin that patches a few things to make
development mode almost as fast as production mode (while still
reloading classes and templates).
Check it out on GitHub: https://github.com/thedarkone/rails-dev-boost
Unfortunately it is only compatible with Rails 2.2 (checkout the
master branch of the plugin) or Rails 2.3 i.e. v2.3.0 tag (checkout
the rails-2-3 branch of the plugin). Those of you still running 2.1
now finally have the real [sic!] incentive to upgrade :).