I know Rails will work with either of them. Is the support and performance equal for both of them? I know there are a lot of arguments about the pros / cons of MySQL and PostgreSQL - but I'm more interested in any Rails specific issues or comparisons.
I don't think there are any Rails-specific gotchas or pros and cons except perhaps the fact that Rails' auto-loading of fixtures when unit testing doesn't always play nice with Postgres if you are using database constraints. Ultimately, the choice of database still comes down to the pros/cons of the databases themselves, not integration with Rails.
Anyway Rails plays nicely with both PostgreSQL and MySQL. As Luke said, it's all about what you want from your DB. I recommend subscribing to Robby Russel's blog because he has some good hints with using Rails and PostgreSQL.