Here's a good article for installing on Mac OSX: http://hivelogic.com/articles/compiling-ruby-rubygems-and-rails-on-snow-leopard/ It's written for Snow Leopard, but the process should be the same for Lion.
OSX comes with Ruby installed at /usr/bin/ruby . You'll need to install gem and rails.
You can confirm where things were installed by running Terminal.app and typing
These will most likely be installed in /usr/bin . This directory has to be included in your PATH variable, which the HiveLogic article describes how to do. The article says to include /usr/local/bin and /usr/local/sbin . Include the directory(s) that ruby, rails, and gem are installed in.
You can find out what versions are installed by typing