Ask HN: 301 redirects bad for SERP ranking?

What is the best way to keep a website's search engine ranking while rebuilding it with a better url structure?

The case in point is a potential customer that has a very messy and broken website running on PHP. It fails on many levels including not using descriptive urls (e.g. /Product.php?10) and very bad table based markup.

I wanted to develop a online shop on Ruby with better urls and better on page SEO but that would break the current url structure.

Will doing 301 redirects from every old page to the its new sibling harm in terms of search engine ranking?

Thanks

Filipe Moreira