Here's my deploy.rb, which hasn't really been updated in a long time. I run two sed commands to set the environment inside my :after_update_code task. I'm certain there's an easier way to do it, but this is my current method.
require 'erb'
before "deploy:setup", :db
after "deploy:update_code", "db:symlink" 
after "deploy", "deploy:cleanup"
def prompt_with_default(var, default)
  set(var) do
    Capistrano::CLI.ui.ask "Enter #{var} [#{default}] : "
  end
  set var, default if eval("#{var.to_s}.empty?")
end
default_run_options[:pty] = true 
set :rake, "/usr/local/bin/rake"
set :user, "your username"
set :application, "application name"
set :repository,  "svn repository path"
set :host, "domain name"
set :db_host, "DB host name"
set :db_user, "DB user name"
set :db_prefix, "any DB name prefix your host might require"
set :rails_env, "production"
set :deploy_to, "/home/username/rails/#{host}" # your deployment directory
role :app, host
role :web, host
role :db,  host, :primary => true
set :use_sudo, false
set :checkout, "export"
#
# TASKS
#
desc "Tasks to execute after code update"
task :after_update_code, :roles => [:app, :db, :web] do
  # Make sure we're running in production
  run "sed -i -e '/ENV.*RAILS_ENV/s/# //' #{release_path}/config/environment.rb"
  run "sed -i -e '/ENV.*RAILS_ENV/s/production/#{rails_env}/' #{release_path}/config/environment.rb"
  # Add banned IPs
  deny_lines = []
  File.readlines("#{release_path}/config/banned_ips").each {|ip|
    deny_lines << "deny from #{ip}"
  }
  ip_ban_block = <<EOBAN
# Bannination
order allow,deny
#{deny_lines.join}
allow from all
EOBAN
  run "sed -i -e 's/# BANNED IPS/#{ip_ban_block}/' #{release_path}/public/.htaccess"
  run "chmod +x #{release_path}/script/runner" 
  run "chmod +x #{release_path}/script/process/reaper" 
  run "chmod +x #{release_path}/script/process/spawner" 
  run "chmod 755 #{release_path}/public/dispatch.*" 
end
desc "Restarting after deployment"
task :after_deploy, :roles => [:app, :db, :web] do
  run "cd #{current_path} && rake RAILS_ENV=production db:sessions:clear tmp:clear"
  # fix permissions
  run "dos2unix #{release_path}/public/dispatch.*"
  run "dos2unix #{release_path}/public/.htaccess"
  run "chmod -R 755 #{release_path}"
  run "chmod -R 775 #{release_path}/log #{release_path}/tmp #{release_path}/script"
  run "find #{release_path}/ | xargs touch"
  run "touch #{deploy_to}/current/public/dispatch.fcgi"
end
desc "Restarting after rollback"
task :after_rollback, :roles => [:app, :db, :web] do
  run "touch #{deploy_to}/current/public/dispatch.fcgi"
end
namespace :db do
  desc "Create database yaml in shared path" 
  task :default do
  prompt_with_default(:db_password, "")
  db_config = ERB.new <<-EOF
base: &base
  adapter: mysql
  port: 3306
  host: #{db_host}
  username: #{db_user}
  password: #{db_password}
development:
  database: #{db_prefix}#{application}development
  <<: *base
test:
  database: #{db_prefix}#{application}test
  <<: *base
production:
  database: #{db_prefix}#{application}production
  <<: *base
EOF
    run "mkdir -p #{shared_path}/config" 
    put db_config.result, "#{shared_path}/config/database.yml" 
  end
  desc "Make symlink for database yaml" 
  task :symlink do
    run "ln -nfs #{shared_path}/config/database.yml #{release_path}/config/database.yml" 
  end
end
Once I set up my variables, I have a bash script that runs:
svn export $svn_path . --force
cap deploy
That'll ask me for my password twice. Once for exporting from SVN, and once as a prompt to automatically generate my database.yml in the shared path.