TwitterApp is a very basic Rails 3 application that demonstrates how to use the Sign in with Twitter workflow with version 1.x of the twitter gem (which has removed built-in OAuth support).
git clone git://github.com/jnunemaker/twitter-app.git
cd twitter-app
bundle install
Using TwitterApp requires you to register an app with Twitter to obtain OAuth credentials. Once you obtain credentials, substitute your consumer key and secret into the command below.
CONSUMER_KEY=abc CONSUMER_SECRET=123 rails server
If you would like to see how to use the omniauth gem for authentication, Erik Michaels-Ober maintains a simple Rails application that demonstrates how to do so.