Depends on how good sys admin you are. VPS/Slice is better in my
opinion.
I would recommend Dreamhost as a rails host. They were probably the
first
ones to use Phusion Passenger.
They don’t cost much, and they also have a dedicated host for you.
I use them for one of my high traffic site (compared to the traffic the
other sites get).
You get pretty much unlimited disk space, unlimited mysql, unlimited
subdomains and unlimited bandwith.
My above statement obviously does not matter if you get to
twitter/facebook
fame, but for any site dreamhost is your site.
I have heard quite a few people complain abut them, but they have always
answered me on support, and always when something goes wrong, it is my
fault. I have been with them for 4-5 years now.
You do get a discount by telling them my e-mail address, and you get 97
days
money paid back no questions asked. They currently have rails 2.2.2 on
the
server I use, but I am quite sure if you ask, they will move you to a
server
which has 2.3.3 if that is a must.
Also, I might add, I also have bough a slice at Slicehost.com (DHH
blogged
about them once). They offer great service and fantastic prices, BUT
you
have to do everything your self. You have to setup and maintain
database,
webserver, firewalls and everything else.
As with dreamhost, put in my e-mail address and you also get a no
question asked money back guarantee.
Slicehost knows Ruby on Rails extremely well, as does dreamhost. They
have
both offered advice and support for free.
Check these two out. I will say that I have no affiliations with either
one
company, except I am a customer.
Hope this helps somewhat,
Trausti