Slicehost has a great HOWTO on installing MySQL, Ruby, Rails & Postfix (email) on a low memory VPS.
http://articles.slicehost.com/2007/9/11/ubuntu-feisty-mysql-and-ror
Also do an apt-get install libmysql-ruby to get around the require ‘mysql’ error
HOWTO: Nginx + Mongrel to server multiple Rails apps
http://blog.jordanisip.com/2007/6/27/rimuhosting-vps-nginx-mongrel-clust…