I've not been terribly impressed with the speed or quality of service of my Rails sites running at ASmallOrange.com. I think they are using mod-ruby in Apache, which doesn't quite work as well as it should, giving Application Errors fairly regularly for no good reason.
TextDrive are the official Rails host, as they hosted the first Rails project - BaseCamp. They support Lighttpd as a Rails Web server, which is very quick and fully compatible. They have an offer on at the moment for $99 a year shared hosting, which is not much more than ASmallOrange, so I thought I'd take the plunge and switch over.
It's taken a little longer to get Rails set up on a sub-domain, but since Textdrive has been hosting Rails applications longer than anyone else, there are a lot of good tutorials and users who can give a helping hand.
The Application Errors that I used to have with ASmallOrange.com stopped happening some time ago. They've obviously updated their setup at some point and fixed the issues. I still run a site on their service and would recommend it.