.bashrc

export PATH=$HOME/.gems/bin:$HOME/opt/bin:$PATH
export GEM_HOME=$HOME/.gems
export GEM_PATH="$GEM_HOME" 
export RUBYLIB="$HOME/opt/lib:$RUBYLIB"

alias gem="nice -n19 ~/opt/bin/gem"

boot.rb

Gem.clear_paths
require 'rubygems'
# Set up gems listed in the Gemfile.
if File.exist?(File.expand_path('../../Gemfile', __FILE__))
  require 'bundler'
  Bundler.setup
end

environment.rb

# Load the rails application
ENV['GEM_PATH'] = File.expand_path('~/.gems') + ':/usr/lib/ruby/gems/1.8'

require File.expand_path('../application', __FILE__)

# Initialize the rails application
App::Application.initialize!

install_rubygems.sh

mkdir ~/src
mkdir ~/opt
cd src
wget http://production.cf.rubygems.org/rubygems/rubygems-1.3.7.tgz
tar xvfz rubygems-1.3.7.tgz
cd rubygems-1.3.7
ruby setup.rb --prefix=$HOME/opt
cd ~/opt/bin/
ln -s gem1.8 gem
gem update --system
gem install bundler
gem install rake