In my test application, I used jrails because I am more interested in jQuery than Prototype. But since jrails doesn’t work with Rails 3, I removed it.
When jrails was removed, I received this error:
undefined method `observe_field' for #<#<Class:0xb6867e58>:0xb6865b6c>
Install Prototype helper plugin
rails plugin install git://github.com/rails/prototype_legacy_helper
Once the prototype_legacy_helper is installed, the missing method is gone but observe_field is not triggering. Removing jQuery fixes this problem.
Now what if you want to use jQuery instead of Prototype? It depends how dependent your application is to Prototype. I have not found a jQuery equivalent for Prototype helper plugin yet so that would be an issue like in my case. Based on this jQuery and Rails 3 tutorial, using the jQuery UJS driver looks very easy.