I have _only_ 1 production application hosted on a hand-built DigitalOcean stack - hell it was a such a process I wrote a guide on how to do it, mainly for my own benefit in the future.
http://tech.pro/tutorial/1335/devops-for-dummies-vps-configu...
Surprise surprise, I try to follow _my own guide_ on a new project I started and it doesn't work as expected. Either RVM changed since writing it, Ubuntu issue with locales preventing postgres from starting, or the odd issue with postgres not installing with a default user. It's a cluster.
Alright, enough fiddling about. I bought myself a book to learn from a professional [0]. Surprise surprise! Outdated not 1 month after it's been released. No longer working, again hunting down the comments area. :P
There's a reason why Heroku is so popular: it makes deployments mind-numbingly simple. (Plus you can scale, but let's worry about that after the app actually runs!)
I'm going to give this a shot using a brand new Ubuntu 13.10 x64 DigitalOcean VPS with a simple CRUD rails application I have. But I'd bet my left arm that something is going to go wrong and yet again I'll have to dive deep into the recesses of the web.
If you run into hiccups, feel free to hit me up directly - ben@federisgroup.com. The plus side of this is that once you do get it figured out once, setting up other servers really is extremely quick.
When you do this you drop a ton of configuration overhead involved with custom paths to your Ruby interpreter. That doesn't sound like much, but when you're fighting with environments in login vs non-login shells, cron jobs, remotely executed Capistrano tasks, etc, it's an overhead that I'm happy to have behind me.
If one of our Ruby apps require a different Ruby version, it goes on a different VM. Sounds like overkill, but you can get a VM down to $5/month from DigitalOcean. How much time is $5/month worth?