I use passenger/mod_rails for development locally (on Mac OSX Snow Leopard). In the apache (or nginx) conf file where passenger's settings live, you set a "PassengerRuby" environment variable. You can point this to whichever ruby installation you're wanting to use (don't forget to restart apache afterwards).
I'm using RVM at the moment for managing my ruby installations. In my user's apache conf file I've got the default Mac OSX snow leopard 1.8.7 set up with passenger, and then also one for a 1.8.6 installation via RVM. Whichever one I want to use is left un-commented.
Here's how it looks at the moment:
# Default passenger
LoadModule passenger_module /Library/Ruby/Gems/1.8/gems/passenger-2.2.5/ext/apache2/mod_passenger.so
PassengerRoot /Library/Ruby/Gems/1.8/gems/passenger-2.2.5
PassengerRuby /System/Library/Frameworks/Ruby.framework/Versions/1.8/usr/bin/ruby
# Use RVM 1.8.6 ruby
# LoadModule passenger_module /Users/dylanfm/.rvm/gems/ruby/1.8.6/gems/passenger-2.2.5/ext/apache2/mod_passenger.so
# PassengerRoot /Users/dylanfm/.rvm/gems/ruby/1.8.6/gems/passenger-2.2.5
# PassengerRuby /Users/dylanfm/.rvm/bin/ruby-1.8.6-p383