The change between 1.1 and 1.2 was much more disruptive than the change between 1.2 and 2.0. The biggest changes are in reworking the RESTful controllers and cutting down the cruft. 2.0 is more polished and shinier now.
The 2.0 release may be coming in close with the upcoming Ruby 2.0 release, which will be highly disruptive (YARV bytecode backend), though I'm not sure if Rails 2.0 will work fine without any changes in Ruby 2.0. Besides, I'm not really sure when Ruby 2.0 is coming out.
I've been hearing that by Xmas for Ruby2 and the Rails guys have been doing quite a bit of work to make sure Rails2 is compatible with the upcoming Ruby release. I'm not sure how much will need to change, but they have indeed been working towards making it compatible.
The 2.0 release may be coming in close with the upcoming Ruby 2.0 release, which will be highly disruptive (YARV bytecode backend), though I'm not sure if Rails 2.0 will work fine without any changes in Ruby 2.0. Besides, I'm not really sure when Ruby 2.0 is coming out.