anybody implemented tag cloud using acts-as-taggable-on gem. I
want to give it a go, but before start i want to see some live demo or
a live site which is using it.
I made some googling but didn't find.

Actually, you can't tell form the front end how it will look like.
Your tag cloud will look like your css tell it to do.
That gem will let you specify css styles to your tags depending on
their "weight", but wont give you anything related to the tag cloud
An example of how to do apply your styling (whatever it is) is shown
on the README

Hope it helps

Thanks Leonrardo, i heard somewhere, this gem is not comfortable with
3.0.10. is it true?

I cannot confirm that, I used it a long time ago, I think it was Rails
2.1.0 or something.
You should go to the gem's homepage and see if it says something about it.
I think it supports Rails 3, which should be fine with Rais 3.0.10,
but that's just a guess.

Hope it helps.