I'm just wondering what is the best way to run ROR on my server.

Shall I use Apache with passenger, or should I be using Nginx/Lighthttp with mongrel and fast cgi?

I keep hearing that apache uses too much memory, but fast cgi makes apps run slowly.

I'm just starting out with ROR, and I don't know a lot about setting it up. I want to make some headway this weekend. If anyone could advise me then I'd be very grateful.

This is just me, but personally I use Apache + Passenger. It's really easy and just works, plus it allows me to serve both Rails and PHP apps painlessly.

Have you got a 360 account or higher?

I just got a Linode 360 and went with Apache first. It was a nightmare on memory usage, and actually crashed my box twice. I think I could have optimized that to work eventually, but...

Then I tried lighttpd and it was about a billion times easier to set up. I can't imagine ever going back to Apache. Lighttpd is easier to set up plus it uses barely any memory. I'm sitting at over 180MB of free memory consistently, even under my heaviest load.

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Apache with mpm worker and passenger.

I don't have a Linode currently (going to get mine on Friday) but I have another VPS with this setup and everything is working perfectly. If you optimize and tune Apache you should have no problems. Just as waltercruz says, Apache + mpm worker seems to be the best.

I'm quite happy with passenger--once I installed Ruby with MBARI patches [1.8.7] so that it didn't leak as much memory
Apache you might be able to tune [have it use MPM, not as many workers]