When Monorail started as ActionPack, I wrote that I don't like the concept. By this time, it seemed like it was just another alternative to BLINQ, which seemed ugly as we know that if Microsoft takes BLINQ seriously, soon or later it'll be the one. Polita [MSFT] is doing very good job with it too!
Two weeks before, I was investigating what's inside for dependancy injection frameworks. Somehow, this led me back to Monorail (cause of it's part of the Castle Project). Well, this time was pretty much different. It now is obviously a replacement of ASP.NET web forms model. Everything else stays the same, handling the request/response, HTTP Handlers, HTTP Modules, everything. You lose the VERY big deal of the server controls, but anyway you'd only do it when this model comes to be quite tiing more than helping.
Once you do, you find yourself in an enviroment much closer to Ruby on rails. The good news is that the existing workings using this model (as per the monorail guys) is combining the two models (web forms and Monorail) so it proves that this is possible.
However, should we expect to see more stuff done this way? I can't so far tell "exactly" where to use LINQ or BLINQ and when to consider Monorail. Note that the UI work will get more complicated either ways. In BLINQ, you know like me that UI generation will not stand, well. the only way to get this better is to provide powerful templating engine, then you get closer to Monorail model, and all this is much closer to ASP Classic HTML/Code editing model, the model I keep seeing its power more and more along with time (from my AJAX work and Scripting/CMS notes and observing successful sites), however hard it is to maintain 
well, that's confusing enough for today I guess!
BTW, this is a good podcast on Monorail from HanselMinutes, if interested 
. I just remembered the topic when was creating list of technical interests yesterday. You know, that endless list that just keeps growing and you can't stop