A while ago I posted that I was having trouble with Ruby Gems on OS X. It was crashing. I gave up trying to fix this in the end, and instead I decided to get Ruby 1.8.6 and install from source, and also get gems 1.0.1. It all seems to be working tickety-boo now. I used the (very clear) instruction here:
http://hivelogic.com/articles/ruby_rails_lighttpd_mysql_tiger/
Hope that helps someone.
Cheers,
B