Boy this is a tough topic. Let me say this... Ruby on Rails, based purely on its merits, is a better solution. I like the Ruby language (although it does take some getting used to), and the Rails framework is beautifully done. The MVC architecture, ActiveRecord, helper functions, all good stuff. However from a business standpoint, it does have some problems. First and most important, good luck finding skilled Ruby programmers. They are few and far between, and this is very important. I could write my app in Ruby on Rails and be very happy, but time is at a premium for me. I need other programmers to do the bulk of the work and maintain the application. Finding PHP programmers is very easy. A lot of people, despite all the hype, have not even heard of Ruby on Rails. Secondly, the documentation is not very good. I've read the "Agile Web Development with Rails" book, and although it is a great introduction, there are a lot of details left out which you later have to piece together through web searches as you start seriously developing. There are an almost endless supply of books on PHP. Also one important thing to keep in mind is that whether you're developing with Ruby for the Rails framework or PHP, how readable/maintainable the code is depends heavily on the individual programmers. You could write all your Ruby code directly into the HTML views and almost totally ignore the models and controllers if you wanted to with Rails. On the other hand you could structure your code very well with PHP and potentially come up with a more readable solution.
Again don't get me wrong, I think Ruby on Rails is great. But it more suited, at least at this point, to the individual programmer who is completely writing/designing the site himself or herself. For a business, the framework simply isn't popular enough or mature enough quite yet. I hope this changes.
The Ruby language itself can present some problems. A large part of the market for the framework & language would presumably be PHP programmers, but I found that the learning curve for them is steep with Ruby. Objects are not an easy topic for many of them, this is why PHP5 has been slow to catch on.
Ultimately we will have to see if the advantages of Ruby on Rails is enough to dislodge the huge installed base of PHP. PHP is free, open source, and very powerful in it's own right. And there are frameworks such as Cake that can give you an MVC architecture. I still think Cake with PHP is inferior to Rails with Ruby, but is the advantage large enough? Time will tell.
