About half a year ago, when I started to learn Ruby and Rails, I first tried Ruby 1.9 but I soon gave up, because at that time nothing worked out of the box and almost every helping blog or tutorial was designed for Ruby 1.8.
What about now? (Dec 2009) Is it possible to get an existing Rails application running by a Ruby and Rails beginner without running into problems which can only be fixed by an absolute Ruby and Rails professional?
In 99.9% of the cases yes, there were rare cases where u might find problems but they should be solved with the new release.
As for the external gems and plugins, most of them now are fully compatible with ruby 1.9, however sepcial cases might exist but I'm not aware of any right now.
Unfortunately I dind't have good experiences with Ruby 1.9 and Rails. You can read more here: Has anyone successfully deployed a Rails project with Ruby 1.9.1?
My opinion is that migrating an existing Rails app from Ruby 1.8.x to Ruby 1.9.1 is not as easy as you would think, event with an excellent test suite.
I'm also quite sure that most of the problems arise from trying to convert an existing application because you are working with an established code base. Starting with a new Rails app with Ruby 1.9 should probably easier because you can trace a problem as soon as you write a single line of code so you can easily isolate which component is not compatible.
When migrating an existing app I had hard time trying to figure out which stack level was actually not compatible with Ruby 1.9. And there are more than one incompatible libraries at the same time I can't tell you how it's difficult to understand which one should be fixed first and which one originated the final error.