Just FYI: Information on successful deployments will be included in the upcoming book “Agile Rails Deployment” from Pragmatic. I took my pdfs and updated them for inclusion in the book.
IIS will not work but the solution we use is to reverse-proxy the aps through IIS using Mongrel and a plugin I created. It makes the Rails apps appear to exist within the IIS environment and would allow you to place the apps on the same box or on a dedicated Linux server.
Feel free to contact me with questions.