Rails kicks butt at pretty complex database models. Have a look at the 2ed Rails book (just came out) -- and the "Recipes" book too -- there a section on ActiveRecord in there w/ lots of neat examples of how you can contextualize associations and stuff to DRY up your code and do really nice things.
Rails works best though if you can go with it's (Rails) conventions such as simple surrogate keys, pluralized table names and stuff. However even on the "go w/ the flow" front things have evolved. I noticed the other day a plugin that let you do compound keys in Rails -- something that a year ago wasn't available. I wouldn't use it myself (mainly because I don't have to -- I have the luxury of going w/ flow) but it is indicative of ActiveRecord's increasing capacity to let you venture away from the opinionated core.
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