For some reason I can only get my ray to sense dynamic objects. In the case of my project having all of the objects that need to be sensed dynamic is a major slow down. Any work arounds? 
Make sure the objects faces are set to collision in order for the ray to detect them. In Blender 2.49b you can do this by selecting an object, going into edit mode (TAB), selecting all the faces (A) and unwrapping them (U) if you haven’t already. Then on the edit buttons (F5) panel look for the tab called ‘texture face’ next to UV calculations and select collision and then hit copy above it to apply it to all the selected faces.
Hope this helps!
Yup, they already are set to collision but the rays still aren’t detecting them.
Try the Sensor object physics type - then, put a Ray sensor in the object and attach it to an And sensor. It should work (if there aren’t collision sensors, etc., then the GE will automatically remove the object from the physics simulation). Here’s a short file on the Blender wiki for help:
http://wiki.blender.org/index.php/Doc:Manual/Game_Engine/Logic/Object_type/Sensor