JRuby 1.0.3 was recently released and so was Rails 2.0. I decided to try JRuby 1.0.3 + Rails 2.0 and realized that a few additional steps (because of Rails 2.0) are required to get a trivial Hello World applcation up and running. Here are the steps:
~/samples/jruby arungupta$ jruby -S gem install rails
--include-dependencies