If you want to try, I would start by downloading the app and making sure you can run it in rails 2. Then, make your own fork of Insoshi on github, and work from that.
There are a number of things to consider when switching to Rails 3: start with Ryan Bates' excellent 3-part screencast series about performing the upgrade:
It will be a while just to get things working at all - a number of files have to be converted. You'll need to upgrade the gems to recent versions; particularly rspec, which is really quite different in Rails 3. Then you need to start running the specs and seeing what doesn't work anymore ... and fixing it, until all the specs work. It's an iterative cycle that may take a while.
If you get to the point where you can run specs, ping me again; I can offer some advice on upgrading the code to match the specs, and upgrading the specs so that they run in Rails 3.
Best of luck!
Evan