The book is targeted at beginning to intermediate Rails developers. You'll need at least a passing familiarity with Rails and Ruby to get the most out of it -- not much time is spent on Ruby syntax, for example.
It's purpose really is to demonstrate to new developers how they can leverage the vast sea of powerful third party plugins to accelerate their development projects. In this way, it's a lot like a typical recipes book. The difference is that each recipe is used within the context of a real-world application and uses one or more plugins to develop some significant feature.
There is a single chapter at the end of the book dedicated to the art of plugin development itself. It walks the reader through the creation of a typical plugin and illustrates how to use the hooks that Rails provides and some Ruby metaprogramming practices to graft new features on to Rails itself. This isn't really the focus of the book (which is on using pre-existing plugins), but we felt it was important to at least address it, and also talk about testing and distributing your plugin code as well.
Although its existence is addressed, the Rails Engines plugin is not used specifically in any of the projects. We had a really tough time of narrowing down the list of plugins we started with to those that felt most practical for beginning to intermediate Rails developers, so it's not that we don't think it's an important one .