I would say the majority of the Rails framework is about the server
side, and making development of that side easier. It also makes the
basic HTML/Javascript web interface fairly easy.

But if you want something "more modern" or more flashy (not
necessarily in the Flash sense), you will need to see what you could
add to the Rails framework. There is currently some work being done to
integrate Laszlo with Rails:

http://groups.google.com/group/laszlo-on-rails

Also there is nothing stopping anyone from creating a standard
client-side GUI application that connects to a Rails-based
web-service. In fact even the GUI could be written in Ruby since there
are several GUI frameworks supported by Ruby (Tk, Qt, Fox, Wx, GTK,
OSX Cocoa, native Windows, etc.)

Still, there is a lot to be said for a good, modern web-browser
supported application. It doesn't require a download to use it, it can
be accessed from almost any operating system and any platform, and can
many times even be used from phones and other mobile devices.

Ryan