Phusion Passenger 4.0.1 final release
blog.phusion.nl
blog.phusion.nl
The main reason why people use Phusion Passenger is because of its ease of use. The way it integrates into Apache and Nginx is unlike other app servers and saves a lot of administration time and effort.
Update process loads our application once and forks it to all the workers like Unicorn does. Puma wanted to load the application as many times as we had workers, which caused a huge spike every time we deployed.
Same goes to the thread handling. It really seems Passenger is the only Ruby server able to handle massive loads with threaded Rails app. Money well spent.
2. Yes. Phusion Passenger 4 fully supports Ruby 2.0 so it doesn't prevent you from using it, but you may run into Ruby 2.0 bugs, e.g. https://bugs.ruby-lang.org/issues/8100. We recommend staying with 1.9.3 until the next Ruby 2.0 patchlevel, but the choice is yours.
Deployment would be vastly eased to the same php strategy of "just ftp the files to the server and visit the website".
I don't think RoR and "cheap hosting" are compatible. RoR adds a maintenance overhead that kills the "cheap" part.
I did admin work for RoR "cheap hosting" and it sucks; lots of gems and multiple versions of them to install etc; this took a lot of my time and made security audits very hard, plus it's not always trivial to install them as some require NEW everything.
Whereas with PHP, 99,9% of the applications run just fine with a relatively simple PHP installation: e.g. core + xml, mysql, imap, gd, mbstring, mcrypt. Update it every once in a while and you're all set!
What RoR programmers need is a cheap vps/container with RVM (or similar) or very specialised platforms (e.g. Heroku).
I can't imagine wheat it'd be like on a shared host with 100 apps all made by different people.
You aren't using bundler, are you? You really really should be. It eliminates the vast majority of that class of problem. It's been best practice in Rails, and ruby deployment in general, to use bundler for several years now, it really does make that kind of problem go away.
Although, really, Rails 2.3x stops getting even security updates very soon, it might make more sense to focus all your energy on getting off Rails 2 -- although I know very well how incredibly painful that is. You're in for pain no matter what, sadly.