You don't have to create Rails. Create something else. Anything else. Release it. If it's good, it'll get attention. Maybe the attention will be less. Doesn't matter. Some attention is better than none. Now, leverage that. Release something else. Leverage it. Go back and improve something else. Pimp one of your things in front of the audience to another one of your things. And vice versa.
* Advertising can never work - sell direct is only option, charge from day one etc
* Fire workaholics etc
* Never take funding
I guess those are the main ones I see as pretty clueless advice.
Don't get me wrong, some of their advice is good, but those bits are also quite obvious. Maybe some people enjoy it. Each to their own :)
If you want to create a company like 37Signals, which sells premium slimmed down feature set webapps to businesses, then their advice probably makes a fair bit of sense. But that's a pretty narrow segment of startups.
Also much of their business seems to be about giving advice, writing books, talks, etc lifecoaching. So their advice is really about creating a company to do that.
Rinse. Repeat. Grow, incrementally.