I set up Rails on a RHEL3 plesk server last month. It's running like a charm so far -- but there are a few gotchas. Here they are, as best I can remember:
1. Red Hat's latest Ruby rpms for RHEL3 are v1.6, and Rails requires v1.8. Unless you want to find RPMs from somewhere else (or you're lucky enough to be using an os that includes ruby 1.8 by default), you'll have to compile Ruby yourself.
2. Neither Red Hat nor Plesk seem to support FastCGI, so you'll have to compile that yourself, too.
3. Ruby doesn't have anything like php's safe_mode and open_basedir restrictions, which means that running rails sites with suexec is a MUST. However, if you've configured FastCGI to use suexec and you don't have cgi-bin enabled for the domains you're running your rails apps in, plesk doesn't include the SuexecUserGroup directive in the domain configuration. That causes suexec to think it's supposed to run your rails app as "nobody", which causes it to spit out the dreaded "Premature end of script headers" error. I spent hours troubleshooting that one.
4. Once you've installed and configured mod_fastcgi for apache, you also have to install fastcgi bindings for ruby. If you use rubygems to do this (you should), you'll need to change Rails' default dispatch.fcgi to 'require_gem "fcgi"' instead of 'require "fcgi"'. I forget the exact spot you have to make that change, but it's easy to find on the Rails wiki (
http://wiki.rubyonrails.com/).
5. When you want to set up a rails app on a domain, the app should go in "domainname.com/rails/" or something like that. Then, remove httpdocs and ln -s rails/public httpdocs. I haven't yet figured out how to do this without ssh, so you either have to give your clients ssh or you have to set up their rails apps for them.
Hmm... that's all I can think of at the moment. If y'all would find a howto post helpful, I could probably write out the whole process step-by-step.
Tyler