I have recently had to scale out a Rails application into a real iPhone application.

Let me save you some time and headache. Stay as far away as you can from the majority of syntactic sugar and shortcuts. The Rails way does not scale.

With that being said, I love Rails and I will continue to use it for the rest of my projects. You just have to realize what parts will be bottlenecks for your (Active Record) and customize your own way to talk to the DB so that you can shard and implement memcached easily.

Now I have obviously not seen what these guys have to offer, I'm sure it is amazing. But you can already communicate with the iPhone with plain old Rails and it works amazingly well.