Agreed. Rails has significantly changed since 2.3.x, and is extremely different to 1.2.x. These changes aren't just for the sake of it - Rails keeps on improving! Start at 3.1 and you won't be sorry.
I started with rails 3 and I haven't had any major hurdles to overcome. I've been very impressed with Rails. I'm coming from a Python/PHP framework background, and so far rails is my favorite (only done a few apps so far, mind you).