Rails 2 is now the default for all newly created Heroku apps.
Existing apps will continue to run on 1.2 unless you edit config/environment.rb and change the version number manually. Importing an app will try to guess the Rails version from your environment.rb, but you should double-check after the import to make sure the version is set to what you wanted.
We’ll leave a 1.2 gem available for a while, but we’re going to take advantage of our beta status here and keep the time window on this relatively short – perhaps a month or two. (Don’t worry, by the time the next major Rails release goes around, we’ll have a plan for longer-term support of legacy versions in place.)