I updated to Rails 3 and tried to deploy the application using passenger in combination with Apache2. I’ve got the following error:

no such file to load — dispatcher

The thing was, that Passenger treats the Rails 3 application as an Rack application because of the config.ru file. To get it run again, you need to change the passenger variables RailsBaseURI and RailsEnv to RackbaseURI and RackEnv respectively in your virtual host configuration of Apache2. Example:

RackBaseURI /
RackEnv production

see also Phusion Passenger User Guide.