downloaded from here
documentation here
If you want to try different solution check it haproxy compiled with: ./configure --sbin-path=/usr/local/sbin --with-http_ssl_module --user=mongrel make make install

with fair balancing

Fair load balancing for nginx from here

./configure  --with-http_ssl_module --user=mongre --add-module=/usr/local/src/gnosek-nginx-upstream-fair --prefix=/usr/local/nginx --error-log-path=/var/log --http-log-path=/var/log 

make && make install

base configuration from here
more and my favorite here is good overview of example config
init script from here

http://haproxy.1wt.eu/ is alternative for the nginx

I have one mongrel cluster which is serving multiple rails applications. In my example I host http://system3.spider.bg and http://www.psspy.se in one mongrel cluster. here are the conf files:

# cat nginx.conf
user  mongrel mongrel;
worker_processes  2;

#error_log  logs/error.log;
error_log  logs/error.log  notice;
#error_log  logs/error.log  info;

#pid        logs/nginx.pid;

events {
    #worker_connections  16385;
    worker_connections  1024;
}

http {
    default_type  application/octet-stream;
    include       mime.types;

    log_format  main  '$remote_addr - $remote_user [$time_local] $request '
                      '"$status" $body_bytes_sent "$http_referer" '
                      '"$http_user_agent" "$http_x_forwarded_for"';

    access_log  logs/access.log  main;
    server_tokens off;

    sendfile        on;
    tcp_nopush     on;
    tcp_nodelay    on;

    #keepalive_timeout  0;
    keepalive_timeout  65;

    gzip  on;
    gzip_proxied any;
#    gzip_http_version 1.1;
#    gzip_comp_level 1;
    gzip_types      text/plain text/html text/css application/x-javascript text/xml application/xml application/xml+rss text/javascript;

    upstream truckhandboken_proxy {
        server 127.0.0.1:8000;
        server 127.0.0.1:8001;
    }

    upstream system3_proxy {
        server 127.0.0.1:8200;
        server 127.0.0.1:8201;
        server 127.0.0.1:8202;
        server 127.0.0.1:8203;
        server 127.0.0.1:8204;
        server 127.0.0.1:8205;
        server 127.0.0.1:8206;
        server 127.0.0.1:8207;
        server 127.0.0.1:8208;
        server 127.0.0.1:8209;
    }

    include     vhosts/*.conf;

    server {
        listen       80;
        server_name  localhost:80;

        #charset koi8-r;

        #access_log  logs/host.access.log  main;

        location / {
            root   html;
            index  index.html index.htm;
        }

        #error_page  404              /404.html;

        # redirect server error pages to the static page /50x.html
        #
        error_page   500 502 503 504  /50x.html;
        location = /50x.html {
            root   html;
        }

        # proxy the PHP scripts to Apache listening on 127.0.0.1:80
        #
        #location ~ \.php$ {
        #    proxy_pass   http://127.0.0.1;
        #}

        # pass the PHP scripts to FastCGI server listening on 127.0.0.1:9000
        #
        #location ~ \.php$ {
        #    root           html;
        #    fastcgi_pass   127.0.0.1:9000;
        #    fastcgi_index  index.php;
        #    fastcgi_param  SCRIPT_FILENAME  /scripts$fastcgi_script_name;
        #    include        fastcgi_params;
        #}

        # deny access to .htaccess files, if Apache's document root
        # concurs with nginx's one
        #
        #location ~ /\.ht {
        #    deny  all;
        #}
    }

    # another virtual host using mix of IP-, name-, and port-based configuration
    #
    #server {
    #    listen       8000;
    #    listen       somename:8080;
    #    server_name  somename  alias  another.alias;

    #    location / {
    #        root   html;
    #        index  index.html index.htm;
    #    }
    #}

    # HTTPS server
    #
    #server {
    #    listen       443;
    #    server_name  localhost;

    #    ssl                  on;
    #    ssl_certificate      cert.pem;
    #    ssl_certificate_key  cert.key;

    #    ssl_session_timeout  5m;

    #    ssl_protocols  SSLv2 SSLv3 TLSv1;
    #    ssl_ciphers  ALL:!ADH:!EXPORT56:RC4+RSA:+HIGH:+MEDIUM:+LOW:+SSLv2:+EXP;
    #    ssl_prefer_server_ciphers   on;

    #    location / {
    #        root   html;
    #        index  index.html index.htm;
    #    }
    #}
}

The virtual host file

# cat system3.conf
    server {
        listen       80;
        #listen      192.168.1.1;
        #listen      192.168.1.1:8080;

        server_name  system3.spider.bg www.system3.spider.bg;

        access_log  logs/system3.access.log  main;

        location / {
            proxy_pass         http://system3_proxy;
            proxy_redirect     off;

            proxy_set_header   Host             $host;
            proxy_set_header   X-Real-IP        $remote_addr;
            proxy_set_header   X-Forwarded-For  $proxy_add_x_forwarded_for;

            client_max_body_size       10m;
            client_body_buffer_size    128k;

            proxy_connect_timeout      90;
            proxy_send_timeout         90;
            proxy_read_timeout         90;

            proxy_buffer_size          4k;
            proxy_buffers              4 32k;
            proxy_busy_buffers_size    64k;
            proxy_temp_file_write_size 64k;
        }
    }

server {
        listen       80;
        #listen      192.168.1.1;
        #listen      192.168.1.1:8080;

        server_name  *.psspy.se psspy.se;
        root    /home/mongrel/system3/current/public;
        access_log  logs/psspy_access.log  main;

        # Set the max size for file uploads to 50Mb
        client_max_body_size 50M;

        # this rewrites all the requests to the maintenance.html
        # page if it exists in the doc root. This is for capistrano's
        # disable web task
        if (-f $document_root/system/maintenance.html) {
            rewrite  ^(.*)$  /system/maintenance.html last;
            break;
        }

        location = / {
            if (-f /index.html){
             rewrite (.*) /index.html last;
            }
            proxy_pass  http://system3_proxy/dagensps;

            proxy_redirect     off;

            proxy_set_header   Host             $host;
            proxy_set_header   X-Real-IP        $remote_addr;
            proxy_set_header   X-Forwarded-For  $proxy_add_x_forwarded_for;
        }

        location / {
            proxy_redirect     off;

            proxy_set_header   Host             $host;
            proxy_set_header   X-Real-IP        $remote_addr;
            proxy_set_header   X-Forwarded-For  $proxy_add_x_forwarded_for;

            client_max_body_size       10m;
            client_body_buffer_size    128k;

            proxy_connect_timeout      90;
            proxy_send_timeout         90;
            proxy_read_timeout         90;

            proxy_buffer_size          4k;
            proxy_buffers              4 32k;
            proxy_busy_buffers_size    64k;
            proxy_temp_file_write_size 64k;

            # If the file exists as a static file serve it directly without
            # running all the other rewite tests on it
            if (-f $request_filename) {
                break;
            }

            # check for index.html for directory index
            # if its there on the filesystem then rewite
            # the url to add /index.html to the end of it
            # and then break to send it to the next config rules.
            if (-f $request_filename/index.html) {
                rewrite (.*) $1/index.html break;
            }

            # this is the meat of the rails page caching config
            # it adds .html to the end of the url and then checks
            # the filesystem for that file. If it exists, then we
            # rewite the url to have explicit .html on the end
            # and then send it on its way to the next config rule.
            # if there is no file on the fs then it sets all the
            # necessary headers and proxies to our upstream mongrels
            if (-f $request_filename.html) {
               rewrite (.*) $1.html break;
            }

            if (!-f $request_filename) {
              proxy_pass         http://system3_proxy;
              break;
            }
        } # location

    error_page   500 502 503 504  /500.html;
    location = /500.html {
      root   /home/mongrel/system3/current/public/500.html;
    }

    error_page   404  /404.html;
    location = /404.html {
      root   /home/mongrel/system3/current/public/404.html;
    }

}# server

Good text: http://rubypond.com/articles/2008/02/01/setting-up-nginx-ssl-and-virtual-hosts/
There is generartor gem nginx_config_generator
example scripts: http://topfunky.net/svn/shovel/nginx/

nginx connects directly to memcached for caching
for restarting nice you might want to see seesaw gem (presentation here) or this blog