For the first release we wanted a stack of projects that "just worked", rather than the latest release of everything. We have a lot more confidence that a new developer to Rails, if using Ruby 1.8.7 from RubyInstaller will have a good development experience, today.
The intent is to upgrade RailsInstaller to Ruby 1.9.2 definitely. For the first release, we went with 1.8.7 to maximize the likelihood of pleasant experiences.
I'd like an integration test suite around RailsInstaller for common use cases of Rails (and other common ecosystem tools, like git). That might go hand in hand with the promotion of ruby 1.9.2 on Windows.