Performance problem with Apache-FCGI-Rails

We have our Rail 1.0 application running on Apache 1.3 with FastCGI. The
httpd.conf has :

FastCgiIpcDir /tmp/fcgi_ipc
FastCgiServer /root/zs/public/dispatch.fcgi -processes 2
FastCgiConfig -autoUpdate -initial-env RAILS_ENV=production
-idle-timeout 120

-maxClassProcesses 2 -killInterval 300

The dispatch.fcgi is the default provided in the Rails app:
#! /usr/local/bin/ruby

require File.dirname(FILE) + “/…/config/environment”
require ‘fcgi_handler’

RailsFCGIHandler.process!

When one person is remotely accessing the application, the speed is very
good. When there

are two or more people accessing, the app becomes very slow. It seems
that the dispatch.fcgi

has to occasionally restart. However, the restart takes about 20
seconds, which makes the

app occassionally slow.
Has anyone faced a similar problem? What is the solution?

Thanks,
Yash