Recently there was a [url=http://cve.mitre.org/cgi-bin/cvename.cgi?name=CVE-2011-5036]security advisory[/url] about hash table vulnerability reported against various companies/platforms. Ruby on rails released an update (3.0.12) which also needs update to rack gem (1.2.5).
Unfortunately, the phusion passenger on dreamhost currently runs rack 1.2.1 and this causes the infamous "already activated rack 1.2.1" error.
The solution would be to update the official (i.e. site-global) rack gem version on dreamhost to 1.2.5 . I raised a support ticket, but dreamhost responded with "you need private server" or use "fastCGI". If more people raise this issue, hopefully they will update the gem. This is not a random feature upgrade, but a security update, so dreamhost should really implement it.