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I went searching for noteworthy Rails 3.1 gems and engines recently and found these to be very interesting:

• active_reload - am using it now, but haven't noticed a difference yet.
• draper - decorators for rails3! I am using this as well, and find it to be useful, but a bit clunky compared to the usual elegance of ruby and rails.

I want to try these out:

• paper_trail - an improved versioning gem
• forem
• high voltage
• css2buttons helpers

UPDATE: I've tried out high voltage - its great! Very simple and easy to use. I'll have to sift through the source code and see what more I can find out about it.

UPDATE 2: I've also tried out forem and found that I really like it! I'm using it on the 2012 Presidential Election site, and plan to replace the forums I'm built myself for FathersWork.com.