Hi Craig
Like what the rest of guys said, Rails is database agnostic. So long as there is an adapter for it, any database should do fine. Coming from a MSSQL background, I wsitched to MySQL for the Rails Project and it has been smooth sailing thus far. In addition, virtually all articles, tutorials is usually MySQL centric.
As for PostGresSQL, It is a sophisticated dB and is absolutely
free 
However, in the ActiveScaffold group, there has been reported issues
on dates and case-sensitivity.
Good Luck with whatever you choose !