A few observations:
1. Running Apache with both mod_php and mod_passenger (assuming that would be your deployment method for Rails app) on a 256 meg slice may be tight if your traffic levels pick up. (Based on experience with mod_wsgi, mod_python and mod_php, I haven't explicitly used mod_passenger and am unaware of its memory/interpreter model, but think it is similar to mod_wsgi.) But it will be enough to manage your existing blogs and additional PHP applications as long as the load doesn't explode.
2. You don't need any linux administration chops to get started, but every year or so I've learned enough additional practices that I grab another slice, setup the new slice from scratch, transfer my webapps/sites to the new slice, and power down the old one. There are just a number of small best-practices that--when avoided--add up to a hard to manage setup over time, especially when managing multiple sites within multiple servers. You'll probably want to do the same.
3. Slicehost has great resources, http://articles.slicehost.com/ , which should cover most configuration/setup details.
4. Switching over to my own slice and doing administration myself has been a very valuable experience for me, and I really do recommend it.