I have everything running under Ruby 1.9.1 on my development system that I need. I may upgrade/migrate my production servers to version 1.9.1 in a week or two if everything continues to go OK.
The last problem that I worked around was a problem in Rails/webrick in dealing with headers+bodies if the bodies contained binary data. I locally patched webrick (my Google groups post).
I can't get mongrel to build with Ruby 1.9.1 so that is an issue since I usually deploy using nginx + mongrel(s) + memcached.