I've been using Rails since before 1.0 and the upgrade pain has decreased significantly over time. The worst upgrade I had was 3.0 to 3.1 where there was a performance regression that caused my test suite to go from 15 mins to about 8 hours on ruby 1.8.7, so I had to simultaneously upgrade to 1.9.3 at the same time. That involved YAML parser changes which I didn't catch before corrupting some serialized data in the DB.
Since that time both ruby and rails have stabilized their upgrades significantly. The biggest issue since then was updating to strong params, and that was only an issue for apps with a large CRUD surface area.
These days I think Rails is the perfect balance of stable and flexible for a wide swath of prototypes and apps. The areas where I'd look for an alternative would be web sockets, heavy concurrency (ie. needing more than background workers), or where raw compute is the bottleneck.