I haven't set up an install guide for the latest ubuntu release, largely because the last set of instructions worked pretty closely with the latest and greatest Ubuntu, 12.04 Precise Pangolin, however when installing today, I found that there were enough differences in the way that I configure my setup to justify an update, so here it goes. Yes, I'm late to the party, but a quick google search didn't find anything that I felt was as complete for my requirements as my previous install guides, so here I go.
As always with my install guides, I have included here is just about everything you'll need (and then some) to get started with ruby on rails development with Ubuntu 12.04 as a platform. These are my settings and preferences, and this is certainly not the only way of doing things, so keep that in mind.
##Step 0: User Setup (from root login)
sudo adduser <username>
sudo adduser sudo