I propose a different funding model for this project. Why not approach Rails hosting vendors like Heroku, Engine Yard, etc. to fund this project, in exchange for built-in one-click deployment to their hosting environment.
Would be a win-win for the user and hosting provider.
There is a slot on the donar list for larger sponsors. I like this model, because the demand from the community will encourage those sponsors to participate. It would have higher risk of return if it wasn't in this public space.
Yeah, it could also be an ongoing funding partnership. My impression would be that this is something that Heroku et al would be very interested in supporting, and even developing themselves.
It would also make an ideal teaching environment: getting students to learn to navigate the Rails installation is half the challenge of getting them started.
Would be a win-win for the user and hosting provider.