Thin is my favorite application server, its fast, its light, and it doesn't require you tie into any particular front end server (unlike passenger, which has its own benefits) Recently I tried to launch a Rail3 project on a box with a few existing Rails2 applications. I was getting all sorts of complaints from rails and thin about gem dependencies. Finally I realized that the thin gem manually requires a specific version of rack (1.1.0) But rails 3 upgrades its rack version to 1.2.1. Needless to say this is quite a pain to work around. I ended up taking the simple way out and setting up RVM and running a separate gemset.

If you haven't already, check out the RVM page on capistrano setup, it makes everything a lot easier.