Gemfile

group :first do
  gem "activerecord", "2.0.5"
end

group :second do
  gem "activerecord", "2.3.5"
end

group :third do
  gem "activerecord", "3.0.0.rc2"
end

Isolate

env :first do
  gem "activerecord", "2.0.5"
end

env :second do
  gem "activerecord", "2.3.5"
end

env :third do
  gem "activerecord", "3.0.0.rc2"
end

omg_bundler.rb

require 'rubygems'
require 'bundler'
Bundler.setup(ARGV.first)
require 'activerecord'

puts ActiveRecord::VERSION::STRING

omg_isolate.rb

require 'rubygems'
require 'isolate/now'
require 'activerecord'

puts ActiveRecord::VERSION::STRING

run.out

1 Birdhouse:~/Development/gem-env jyurek (master)$ gem install isolate && gem install bundler --pre
Successfully installed isolate-2.1.2
1 gem installed
Successfully installed bundler-1.0.0.rc.6
1 gem installed
0 Birdhouse:~/Development/gem-env jyurek (master)$ ISOLATE_ENV=first ruby omg_isolate.rb
/Users/jyurek/.rvm/rubies/ruby-1.8.7-p299/lib/ruby/site_ruby/1.8/rubygems.rb:233:in `activate': can't activate activerecord (= 2.3.8, runtime) for [], already activated activerecord-3.0.0.rc2 for [] (Gem::LoadError)
	from /Users/jyurek/.rvm/rubies/ruby-1.8.7-p299/lib/ruby/site_ruby/1.8/rubygems/custom_require.rb:35:in `require'
	from omg_isolate.rb:3
1 Birdhouse:~/Development/gem-env jyurek (master)$ ruby omg_bundler.rb second
/Users/jyurek/.rvm/gems/ruby-1.8.7-p299/gems/bundler-1.0.0.rc.6/lib/bundler/dsl.rb:67:in `gem': You cannot specify the same gem twice with different version requirements. You specified: activerecord (= 2.0.5) and activerecord (= 2.3.5) (Bundler::DslError)
	from /Users/jyurek/Development/gem-env/Gemfile:6:in `build'
	from /Users/jyurek/.rvm/gems/ruby-1.8.7-p299/gems/bundler-1.0.0.rc.6/lib/bundler/dsl.rb:127:in `group'
	from /Users/jyurek/Development/gem-env/Gemfile:5:in `build'
	from /Users/jyurek/.rvm/gems/ruby-1.8.7-p299/gems/bundler-1.0.0.rc.6/lib/bundler.rb:128:in `definition'
	from /Users/jyurek/.rvm/gems/ruby-1.8.7-p299/gems/bundler-1.0.0.rc.6/lib/bundler.rb:116:in `load'
	from /Users/jyurek/.rvm/gems/ruby-1.8.7-p299/gems/bundler-1.0.0.rc.6/lib/bundler.rb:107:in `setup'
	from omg_bundler.rb:3
1 Birdhouse:~/Development/gem-env jyurek (master)$