How to instal rails on bluehost 2.3.2
Bluehost recently upgraded rails and I had some problems with my old and new apps. I wrote a more comprehensive tutorial here, which also has info from bluehost they haven't posted yet. I am just writing this to give a short rails install overview for bluehost for anyone with some command line and rails experience.

1.) Get shell enabled.
2.) Go to your home
> cd ~
> rails -D appname
> rm public_html
> ln -s appname/public public_html

Done... goto sitename.com and you will see rails welcome.

For mysql and to make sure dispatch.fcgi is running right you need to log into mysitename.com/cpanel and create a mysql user account.

(remember they append your bluehost username to the db name)

Here is what you should see in your appname/config/database.yml for development

development:
  adapter: mysql
  database: dbname
  username: dbusername
  password: dbuserpass
  socket: /var/lib/mysql/mysql.sock
  timeout: 5000

For a quick test type
> cd appname
> script/generate controller test
> vim app/views/test/index.erb
Put some text into the index file and save

now goto mysitename.com/test and you should see you text and rails is running!

One small note for those that aren't used to running rails in this manner, when you update config files, or routes you usually need to kill the dispatch process.
1..) Login to your cpanel
2.) Click on process manager
3.) Find the dispatch process and click on kill

Now you can reload an see new routes, etc.