I think they're quite different. Appfuse is described as "an application for kickstarting webapp development", while Ruby on Rails is a web application framework. Let me explain.
I see Appfuse as a gluecode generator. You configure it, add some metadata and it'll automatically create configuration files, code, etc. to make use of other frameworks like Spring, Hibernate, Struts, iBATIS, etc. Appfuse doesn't provide most of the functionality, it relies on other frameworks to do so.
On the other hand, Rails is a more complete application framework. You build applications that rely on the functionality Rails provides like ActiveRecord (ORM), ActiveSupport (utilities), etc. You need very little configuration in Rails, as long as you follow certain conventions everything will work "magically" at runtime.
I think many people have a mistaken idea of Rails because of one of its features: Scaffolding. Scaffolding is a simple code generator that creates barebones code ("scaffolding") that you develop from. In that respect, it's similar to Appfuse. It's definitely one of the most "visual" features of Rails, the one that is more easily "sellable". That's the feature the article you mention describes.
However, Rails is much more than Scaffolding. I see it as an integrated web development framework. You get ORM, views, utilities, testing, migrations, logging, a server, and much more out of the box, everything is part of a single framework. And a very well designed one! It is developed upon a lot of best practices and approaches. And yet, it's not complex but quite simple in most cases.
Some people even think avoiding Scaffolding (in its current state) is a good idea. For a good presentation on the subject: http://www.slash7.com/presentations/overcoming_scaffolding_addiction.pdf