Adobe Flex a very different approach to the rich client model. GWT will be on the same side as Prototype, Dojo, etc. if there is a showdown with Flex. Flex is not an alternative to GWT but rather an alternative to AJAX. I suspect both sides will continue to coexist peacefully.
Keep in mind that GWT is not a full web framework. So it's pointless to argue which is better, web framework or GWT, just like apples and oranges. You can use GWT with whichever back end framework (e.g. Rails) you want if you choose to go that route. Like I said earlier, GWT is an alternative to JS frameworks like Prototype, not server frameworks like Rails. What GWT does allow you to do is not use a web framework at all since its server-side calls are very easy to implement. But if you require a DB, etc, you can still use Rails and GWT.
Keep in mind that GWT is not a full web framework. So it's pointless to argue which is better, web framework or GWT, just like apples and oranges. You can use GWT with whichever back end framework (e.g. Rails) you want if you choose to go that route. Like I said earlier, GWT is an alternative to JS frameworks like Prototype, not server frameworks like Rails. What GWT does allow you to do is not use a web framework at all since its server-side calls are very easy to implement. But if you require a DB, etc, you can still use Rails and GWT.