Good start ... I was able to get an app created and deployed to appspot. Had some trouble running it locally, though.

I'd be great to see some info on how to run migrations and other rake tasks on app engine.

I had the opposite experience. Got it to run locally, but failed when deployed.

I wonder how performant this will be?

From the benchmarks I've seen of Python / PHP / Ruby, etc. Ruby isn't blisteringly fast anyway, and if run in an interpreted Java VM in a relatively new in-house Java runtime then it might not be a great solution for web apps that need speed or scalability.

Not bashing Ruby here, nor the app engine. I guess it'd be a neat environment to write small / demo apps in without shelling out for hosting.

JRuby tends to be faster than C Ruby. Ruby code gets (or can get) compiled down to Java classes. It's still not as fast as actual Java, but quite peppy.