One of my new consulting clients has redefined Rails performance for me. ChaCha is a very cool, human-powered search engine. If you don't like your results, you ask a Guide to help you search. Free of charge (it's ad supported), they'll walk you through search results until you find what you need. This is a great feature for your parents and clueless friends who can't find anything on the internet, but I'm also finding it useful myself. They index Guide search results so their hits are pretty good.
What kind of traffic are they getting? You tell me. Here's their Alexa.com graph. That looks like a decent amount of traffic to me. What do you think?
And it's a Rails app.
Rails doesn't scale? Have you tried? I'm starting to think that just like a J2EE or dotNet app, you can write a bad code that doesn't scale, or a lean, well-designed project that scales just fine. It's more the developers than the technology, assuming the base technology is good enough.
Looks like Rails is good enough.
Jared
Read: Rails Doesn't Scale... Or Does It?