I totally switched to 1.9, wiped 1.8.* from my development systems. In a few cases I had problems (like manual edits to acts_as_list) but life is simpler and the runtime speed increase is really nice. Pardon a link to my own stuff, but I have written about the 1.9 conversion: rubyplanet.net

I am trying to maintain Ruby 1.9.1 and JRuby compatibility on my rails apps which is getting easier to do.