Slicehost

SliceHost is defiantly the best rails host that I have used. Here are the big advantages:

You have your very own "virtual server":

• Shared hosting sucks. Its difficult to get SSH access, the web servers are slow, they are not optimized for Rails
• With your own server, you can install your own versions of whatever you want. If you want to run Mysql 4 with PHP 4, then its your choice.
  

No Stupid Contracts:

• Slicehost is a month-to-month contract. If you don't like them, just drop them.
  

Pre-built Linux Distributions:

• Setting up a slice with Linux is a breeze. They have many distributions already built including Ubuntu, CentOs, Debian, etc..

Built in DNS:

• Installing and configuring BIND is something I would like to avoid. Slicehost has nameservers that you could use, and an extremely simple interface to modify records.
  

Articles:

• I love guides. I don't want to spend hours "figuring things out". I want a guide that works and showes me step-by-step. SliceHost has a number of articles on how to setup things on your server. Some of the articles I have used are:
• Setting up DNS records
• Setting up a Mail Server
• Rebooting My Slice
• And many more...

I have been very pleased with their customer service and support. I would HIGHLY recommend it for anyone looking for a great web host.
Here is a link to their website:
SliceHost