Rails 3 is very much ready for production use. It's in use on big sites like Shopify (you can read about their long path to Rails 3 here: http://blog.shopify.com/2010/11/16/our-upgrade-to-rails-3).
I've recently upgraded my own Rails 2.3.x app to Rails 3, and it runs fine on Passenger. I didn't encounter any compatibility problems with Passenger 3 and the site has been running on Rails 3 + Passenger for about a month now with no problems.
Since you're starting a new project, I'd strongly recommend you start on Rails 3 because frankly the upgrade to Rails 3 can be quite painful like Shopify's story.