Ruby on Rails

I'm fairly new to Ruby (around 6 months) and to RoR (about two or three
weeks of practical experience). However, for an important programming
project, I'm (for economical reasons) stuck serving my app on a hosted
web server which uses Ruby 1.8.7 and Rails 2.3.10. But I want to be
using Ruby 1.9 and Rails 3.

My Rails book seemed to indicate (if I understood correctly) that you
could actually pick which version of Rails your app used, even if it is
not what is installed on the server. Could somebody give me some insight
into how that works? Also, it it possible to have (and use) your own
"local" installation of Ruby (inside your HOME directory) that is the
version you prefer?

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