Error Installing rails on Ubuntu 10.04 - ruby-on-rails

Question

I am trying to install rails on Ubuntu 10.04. So far, I've executed these commands:
apt-get install build-essential libapache2-mod-passenger apache2 rubygems ruby1.8-dev libopenssl-ruby
gem install fastthread
gem install rails
Fastthread installed easily. However, trying to install rails results in:
ERROR: Error installing rails:
bundler requires RubyGems version >= 1.3.6
So, I tried gem -v which returned 1.3.5.
How do I upgrade rubygems? apt-get won't install above 1.3.5. And gem update --system results in:
ERROR: While executing gem ... (RuntimeError)
gem update --system is disabled on Debian. RubyGems can be updated using the official Debian repositories by aptitude or apt-get.
So right now I simply can't install rails, because I need a newer version of rubygems, and ubuntu won't let me upgrade my current version of rubygems.
As a side note, i tried installed rails via apt-get install rails which seemed to work, but I don't see rails as a gem when i type gem list. What's the deal with that?
Another note: The result of gem list is:
*** LOCAL GEMS ***
abstract (1.0.0)
actionmailer (3.0.1, 3.0.0)
actionpack (3.0.1, 3.0.0)
activemodel (3.0.1, 3.0.0)
activerecord (3.0.1, 3.0.0)
activeresource (3.0.1, 3.0.0)
activesupport (3.0.1, 3.0.0)
arel (2.0.1, 1.0.1)
builder (2.1.2)
erubis (2.6.6)
fastthread (1.0.7)
i18n (0.4.2)
mail (2.2.9)
mime-types (1.16)
mysql (2.8.1)
polyglot (0.3.1)
rack (1.2.1)
rack-mount (0.6.13)
rack-test (0.5.6)
railties (3.0.1, 3.0.0)
rake (0.8.7)
rubygems-update (1.3.7)
thor (0.14.4)
treetop (1.4.8)
tzinfo (0.3.23)
I assume installing rails via apt-get installed those gems? Prior to installing rails through apt-get I only had mysql and fastthread.

Answer 1

There is also a gem available which handles the update
sudo gem install rubygems-update
sudo /var/lib/gems/1.8/bin/update_rubygems

Answer 2

You have to manually install rubygems 1.3.7 (wget from website, extract, run setup.rb).

Answer 3

Install rvm and take control of your ruby environment.
http://rvm.io/

Answer 4

This may be a newer way of doing it that wasn't available before, but I ran
sudo gem update --system
and it gave me the latest version.

Answer 5

For some reason, Debian/Ubuntu Ruby package doesn't include the RubyGems library. Even worst, RubyGems has been bundled into Ruby 1.9.x but if you try to install it via apt-get, the package manager will force you to install them as two separate packages.
Debian/Ubuntu RubyGems package is outdated, as you noticed, and to make things even more complicated you can't upgrade the packaged version of RubyGems just installing a new RubyGems versions on top of it because the system is patched to prevent you to complete the task, as you experienced.
My suggestion is to avoid using the Ubuntu/Debian pckaged version.
The alternatives are:
for a development system, use RVM
for a production server, install Ruby from source. If you want Ruby < 1.9 you can use Ruby Enterprise edition that is also available as Debian/Ubuntu package. If you want Ruby 1.9.x, compile it from the source.