Well 3 + a local dedicated development server.

For some people it may be overkill, but I see it as good planning and future proofing.

I run more than 1 rails application too, actually deploying upwards of 20 total over the next 2 months, so I need a dedicated area to store repositories (SVN), and it’s defiantly good practice to separate out the sql server from the rails server.

And as far as cost goes, it’s not much. Slicehost offer slices from as low as $20. So if you’re only getting started you’re looking at $40 for 2 virtual servers, each dedicated and saleable up when you need it.

I know a lot of people like to run rails apps in a shared environment, but if you do you’re stuck compromising on the speed of your app, stuck using low performance webservers like apache or lightty.

It’s well worth the money to run a couple of slicehost servers, and they are all yours, run as many apps on them as you want.