I've been running a production app on Edge Rails (straight from SVN trunk) for about a month now and it's been all good. The new-ish REST routing enhancements are great once you get your head around it. I also like the ideas behind the performance enhancements, though I haven't had a chance to really flex them yet.
Beware though, they "yanked" out a lot of common things from rails core, so if you are upgrading an existing app you may spend quite a bit of time getting things working again.
Just follow the advice of upgrading to 1.2.3 (and soon 1.2.4) first as you'll get deprecation warnings before jumping straight into 2.0
Looks like a nice, solid release. Lots of fixes, lots of tweaks to make things cleaner, easier, and more flexible. Nothing game changing, but a very solid job by the core team.
much as I not so much a fan of rails these days, I do like the way they have embraced HTTP in all its "glory" - its a simple solid protocol that is well known. Why not embrace it !