Since this question seems to get asked every now and then, I thought
I'd just chime in...
I've been developing happily on Windows for the last 3 years. Every
now and then there might be a small issue, but otherwise it hasn't
been as painful as many would have you believe. I do have an Ubuntu
virtual machine that I play around on as well, but you can totally get
by using Windows. The only limitation is that there is a lack of
something like RVM for Windows (unless I've missed something). So if
you're dealing with rails apps that require you chopping and changing
between versions of Ruby, you'll want to look at that Ubuntu virtual
When it comes to production, it makes no sense to use Windows. You'd
really have to be into that whole self-whipping thing. I've been using
Heroku exclusively for the last year, and could not be happier. It
really is all that.
If you DO NEED to use Windows for production, consider switching to
ASP.NET MVC... your life will almost certainly be easier.