We often get asked, “who do you use for hosting?”. When RubyOnRails was pre 1.0 we were rolling and hosting our own because deployment was so vicious, but that was a time long ago. We have for some time been using SliceHost and couldn’t be happier. We have even created a script to automate setting up a rails stack on a slice, we should probably release that to the public. Slicehost is pretty cost effective for staging and sandboxes at under $25/month and scales decently while being affordable for production. However, the real magic of SliceHost is the fabulous service.
Often we will start a customer out on a small development slice on our SliceHost account. Then as things get moving and they get their own SliceHost account created and ready to go, we can very easily move a slice from our account to their newly created account, no interruption of service. Generally we submit a ticket and within 5 minutes we have a response and the slice is moved. It is hard to not recommend a company that is that responsive to your needs. SliceHost keep up the good work! In fact, they just move a slice for me in less time than it took to write and publish this post.
I assume you’ve looked at Heroku?