Please feel free to add a comment if you disagree with this, but I just don't see problems with excessive memory use in long-running Ruby apps like Rails and Merb. I saw a blog entry this morning where someone running a small web app and including passenger and Apache - about a dozen processes with a very large combined memory footprint.
I just checked two long-running deployments of mine (one Rails and one Merb) and the Rails application processes totaled about 80 MB VSIZE and the Merb combined processes were about 70MB VSIZE. In my setup, add in about 7.5 MB for nginx and 10 MB for memcached. Nginx and memcached are shared by all web apps, long-running and experiments, running on this particular server.
Have you seen excessive memory use in your deployments? If so, what are your setups? On the other hand, I would also like to hear about low-memory deployment schemes. I have not tried Phusion Passenger but I heard good things at MerbCamp 2008 about reduced memory use with Passenger.