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Rvm
There is a new-ish gem called rvm that allows you to manage ruby vms and gems with a few simple commands. I just used it to unscrew my dreamhost server out of config hell with gems. In less then an hour i rebuild ruby 1.8.7 and ruby 1.9.1 and install most of the gems dreamhost gives a standard account.
I suggest looking at RVM very closely. I will never run another ruby box with out it.