R2.2: config.gems

What does the new config.gems get you that the old $GEM_PATH and
$GEM_HOME does not?

See http://wiki.rubyonrails.org/rails/pages/HowToUseMultipleGemRepositories

I just have a global gems repo, and the wider use-any-gem
functionality of vendor/gems for all gems, not just rails,
by setting:
GEM_HOME to RAILS_ROOT/gems
and setting:
GEM_PATH to $GEM_HOME:<the rest>

What am I missing?

just
%mkdir gems gems/bin
%export GEM_HOME=gems

and so on. See the web page above.

What does the new config.gems get you that the old $GEM_PATH and
$GEM_HOME does not?

That everything in your app is under source control (and conversely
deploying/updating your app just implies checking out the code)

Fred