What deployment directories do you use for Rails applications (deploying to a debian box)?
As other people have said, it really doesn't matter where you keep your applications - the thing that does matter is that you're consistent about it, so that whichever server you're on, its just a case of going to the usual location.
I think the only reason people use /u/apps/#{appname} is that it's Capistrano's default setting - certainly it seems odd to me doing things that way.
I tend to create a dedicated user for each rails app I run and install, and add that user to the www-data group. So, I tend to have /home/mephisto/www, /home/warehouse/www and so on.
I do this purely for organization, and I don't think it matters much.