The main reason why we need to run multiple mongrel instances (pack of mongrels) for any high traffic website is that Ruby on Rails code is not thread safe. This is not the case with other Ruby frameworks like Camping, Merb and Og + Nitro. There is a synchronized block around the calls to Dispatcher.dispatch (in dispatch.rb) rest is multithreaded. so to get any sort of concurrency in serving request we need to run multiple mongrel instances.
In my experience 128 MB RAM is required to run single instance of mongrel server. which means you should not run more than 8 mongrels on your 1 GB RAM VPS. If the rails could be thread safe it would require lot less server resources to deploy rails with mongrels.