Currently I am working with a company that is upgrading their Rails 1.2.3 app to Rails 3.0.13. We decided not to tackle the asset pipeline in this go around.
In production their app resides on a Windows server hosted inside the clients walls and operates off of MS-SQL. I have it up and running on my Windows box at home while I work on an Ubuntu laptop. I am trying to make it as agnostic as possible so that should a client want the Rails app on a Linux server there is little to change. Who knows how successful this will be.