Is there any benefit to Rails 2?
Ok, so I bit the bullet and bought the Agile Web Dev book that some people suggested here (http://news.ycombinator.com/item?id=101571 - thanks for that by the way!). It's a really well written book (so far), but uses Rails 1.8, not Rails 2. Is there actually any benefit to using 2 over 1.8?
Plenty of benefits; improved support for REST is a major one, but there are tons of little fixes that make life much easier. The link in chaostheory's comment is a good overview, or (if you feel like spending $9 more) you can buy Ryan Daigle's Rails 2 PDF at http://peepcode.com/products/rails2-pdf - Daigle runs a well-respected blog that keeps track of the newest developments in edge, so was able to pick out the most important things to write about.
I think you might be confused between Ruby and Rails.
Ruby's current version is 1.8.6, while 1.9 is nearing an official release and 2.0 is still very experimental at this point.
Rails' current version is 2.0.2, but the last release on the 1.x branch was 1.2.6.
I'm going to assume that you meant Rails 1.2.x versus Rails 2.x. Yes, there are a lot of advantages. Mainly though, there aren't really any disadvantages- there's no reason not to use Rails 2.0.
yes besides bug fixes there are performance improvements - db caching, new features (in production all separate css files are combined automatically into one), and so on
The agile web dev with rails book is junk. Get Obie's 'Rails Way' book like nickb suggested.
And yeah, there's some good new stuff in Rails 2.