Eclipse

I've long been a fan of Eclipse and I think that it makes for a pretty good dev setup.

Eclipse Europa or later - 3.2 doesn't seem to work for some of the below plugins
RDT - Ruby Development Tools
- Core plugin for just ruby - seems pretty solid
Aptana's Core Plugin
Aptana's RadRails
- Not only does Aptanta give you some nice editors, .html, .xml, .rhtml ..etc. , but it also allows for running rails within Eclipse.
Mongrel
- You can use the default for rails (WebBrick), but I've found Mongrel to be faster and work a lot better with the launcher from Aptana

Ruby Development