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Make sure you add this to your $PATH.
I usually place this in /opt/ruby/bin and recommend you to do so, too.
Or at least inside $RUBY_PREFIX/bin.
Should work otherwise, but I never tested that (and don't plan to)
You need to set those values in your .bashrc or somewhere:
RUBY_PATH (mine is /opt/ruby)
RUBY_VERSION (default ruby version, mine is 1.8.7)
install_ruby 1.8.7
every_ruby -v
gem install rails