Ruby's current version is 1.8.6, while 1.9 is nearing an official release and 2.0 is still very experimental at this point.
Rails' current version is 2.0.2, but the last release on the 1.x branch was 1.2.6.
I'm going to assume that you meant Rails 1.2.x versus Rails 2.x. Yes, there are a lot of advantages. Mainly though, there aren't really any disadvantages- there's no reason not to use Rails 2.0.
Lots of little things are changed. Some of them are confusing and hard to decipher when tutorials and message boards say things should be working when they're not.
http://www.amazon.com/Rails-Way-Addison-Wesley-Professional-...
Edit: is that the Obie from the "do you think we are stupid" thread?
And yeah, there's some good new stuff in Rails 2.