How to Install Ruby on rails in your system

sudo aptitude install subversion
 sudo apt-get install git-core

And you can also installed the suggested package 

: git-doc git-arch git-cvs git-svn git-email 

git-daemon-run git-gui gitk gitweb diff-doc.

1) Database setup:

Mysql database:  sudo aptitude install mysql-server mysql-client

PostgresSQL:
 sudo apt-get install postgresql postgresql-client postgresql-contrib
 sudo apt-get install pgadmin3
 sudo apt-get install libpq-dev

refer link  http://hocuspokus.net/2007/11/install-postgresql-on-ubuntu-710

3) Development IDE : Netbeans
  First download the latest version for Ruby on

 http://www.netbeans.org/ and install it with sh.
  You need Java to run Netbeans

from command prompt type:

sudo sh ./netbeans.sh (path where your netbeans exists))

1) Now lets install Ruby on Rails:

in the Terminal (Applications -> Accessories -> Terminal)
key in the following commands

#sudo su
#apt-get install build-essential
#apt-get install ruby rdoc libopenssl-ruby
#wget http://production.cf.rubygems.org/rubygems/rubygems-1.3.7.tgz
#tar zxvf rubygems-1.3.7.tgz
#cd rubygems-1.3.7
#ruby setup.rb
#ln -s /usr/bin/gem1.8 /usr/local/bin/gem
#gem install rails -v 2.3.8

This should install rails 2.3.8 version.

Now we can install desired gems for the databases we use either postgres or mysql:

MySQL gem:
   sudo gem install mysql

Postgres gem:
sudo gem install postgres-pr
sudo gem install postgres

Thats it this should be able help you install rails development environment.