I use heroku.com for deploying the Rails application. I host the application domain name through Google Apps/eNom, and use gmail (with my domain) for the email features of the Rails application. I get Google's domain registrar partner for my domain (eNom) to point the www subdomain to the heroku URL for my app instead of Google's pages for my domain.
I'm not interested in learning how to configure Apache, ModRails, Phusion, Mongrel, Thin, MySQL, and whatever. With Heroku I don't worry. nginx is the web server, and PostgreSQL is the database. They have settled on Ruby/Rack for all new apps. Frameworks that run on Rack include Rails, Merb, and Sinatra. Limited choices.
Heroku is nice. I develop my application at home on Ubuntu, using the SQLite3 database built into Rails. Once I finish testing locally I commit the code using git. After you install the heroku gem installed, you just run a couple of commands to create an application on heroku.com, and you may need to create your SSH keys as well. To deploy, you just do:
git push heroku master
That's it. Heroku will restart your application when the push is complete, and your app is up and running. (You may have to run data migrations by hand if you changed the data schema).
They have a free plan for low-volume and small applications, but it is amazing how much you get for free. They are also happy to take your money for paid plans. Their pricing looks a little higher than that of Google App Engine. The nice thing about that is that you don't have to pay until you have lots of traffic (and probably ways to monetize that traffic).
Heroku itself is based on Amazon EC2, so you can be sure that they will have very low pricing based on a-la-carte usage of processing, storage, and bandwidth.