UPDATE: I've extended this post based on the feedback in some of the comments. So I haven't used all of the rails hosts listed here, but I'll make it clear which those are.
Working for various clients and along side various colleagues over the years, I've been witness to a whole number of hosting providers in the ruby/rails space. Some are great, others acceptable, and a few were just down right terrible. So how do you go about choosing which host is the right one for you? Read on...;
One of the early things I came to appreciate when working with rails was how it made me get more involved with the rest of the eco-system on the server. Previously I'd just copy an ASP/.Net app across a share, maybe restart IIS. Or I'd upload some PHP and maybe setup a virtual host entry for Apache and be done with it. Now it's not uncommon to have to create a deploy user, install some gems, maybe download a few dependencies (imagemagick?) and compile them on the server. Not to mention setting up monit or god to monitor various processes. With all that in mind, I've given up on paying the extra money to get a "managed service". More often than not it all goes out the window because I'm using a package I compiled myself rather than the dated version in the package management system, or they just don't have enough of a clue on the ruby/rails front to be useful. So to make this a somewhat level playing field, keep in mind that I'm working under that basis that anything software related you need to be able to resolve yourself with these providers (if they give you access). We will leave hardware up to them.
So without further ado, here's my list of personal experiences if you're willing to go the unmanaged route.
This is the unmanaged brand of Peer1, and they're who I currently host all of my own production and development sites with. I really can't endorse them highly enough. You can have a low-end dedicated server for development purposes from as little as $75/month, and they'll often run specials so watch their page. I grabbed a quad-core dual xeon with 2GB of RAM, and a 2000GB transfer allowance for $179/month (they currently have RAID capable dual-core Xeons for $139). A choice of server locations if that is important to you, as well as hardware firewall, backup, and all the various offerings you come to expect. They also send a survey around each year and customers get to vote on what new offerings they should provide. Cloud computing was on the list this year, lets see if it turns out to be as competitive as EC2 and the like.
Another excellent provider. I've used these guys as my main provider for quite a while until our needs got a little too much for a fully worked VPS, and their dedicated plans just didn't quite match the value Serverbeach offered. That being said, unless you've got particularly high transfer or memory requirements I doubt you'll have any problems at all with what they offer. I still have one of our sites running over there, and a number of client sites, and I have no intention of moving.
I've worked on these quite a bit for various clients, and I feel a little ho hum. There's not as though there is anything exactly wrong with the product they offer, I just think for the price point ($250/month for a dedicated CPU) it's a little on the expensive side for what you get. It's almost a cross between an unmanaged and fully managed setup. You pay the price of the latter but set a lot of it up yourself by running a series of scripts and installing local gems (as detailed on their wiki).
Now I need to put a disclaimer on this one at the preface; I haven't used these guys in almost three years, and hopefully things have changed since then. However, at the time their rails support was dreadful. I only ever ran one site there which was a rather simple blog, and uploading images and resizing with rmagick (ala attachment_fu/paperclip) resulted in me bringing down what was obviously a seriously overloaded server. And from what I was informed it wasn't just my account which was affected, it would halt any VPS running on the same physical machine. After being unable to place any kind of CPU quota on my account to stop other from being affected, or having a box more suitable for running rails as advertised I had to take things elsewhere. Suffice to say, I've not been back.
I've not used them personally, but have worked closely with quite a few people who host their sites on them. For the money ($20/month), they're hard to beat. And if all you need is a VPS to run your blog, I'd think you'd be hard pressed beating them for value.
Another one I've not used personally, but it got a few mentions within the comments of the article when I first posted it so I thought it was worthy of pointing out. They have their own management panel and run your setup using Xen. Prices start from US$19.95/month and include 200GB data transfer.
At the other end of the spectrum is the fully managed services. Take all the worry out of actually building your box and only concern yourself with deployment. If that's the kind of dream you think you're willing to pay for, then your options are:
The big daddy in the ruby/rails hosting world, if you've not heard of them you must obviously have been living under a rock. At $399+/month you're comparatively paying through the nose when measured against the unmangaged offers, but when the the employee lists consists of the likes of Ezra Zygumnowitcz, Yehuda Katz, Evan Phoenix, etc. then I don't think you're going to find a better crack squad of ruby experts to manage things for you.
They've been in the game for years, long before rails was on the scene, and they are seriously excellent for most hosting needs. I've only used them a few times, and only have good things to say. However, feedback in the comments seems to indicate that for rails based apps their support is lacking. They don't advertise their price on their site, but expect it to be somewhere above $400/month. At that price, it's hard for them to be a serious consideration against EngineYard.
ServerBeach back again with their managed offering. I can't really say much more other than their hardware is exceptional and their support when I've needed it likewise. You'll need to contact them for details on price.
Another one back again with a managed offering, this time for $349/month. On top of your hosting monthly hosting fees it puts them above most the others in terms of cost.
There are a heap to choose from, and far too many for me to be able to give an experienced and qualified view on. Personally though, I'm quite happy with my unmanaged dedicated servers and having a separate management contract for the ones that I need to maintain five 9 uptime with. It gives me the business continuity I want and the comfort of having a much closer personal relationship with a handful of people who actually know and understand my business, at a price that is significantly lower than most of the packaged deals.
I'd love to hear from others out there that have had experiences with other hosting providers though so please leave your thoughts, good or bad, in the comments section.