I see this all the time in Ruby:
require File.dirname(__FILE__) + \"/../../config/environment\"
What does __FILE__ mean?
It is a reference to the current file name. In the file foo.rb, __FILE__ would be interpreted as "foo.rb".
Edit: Ruby 1.9.2 and 1.9.3 appear to behave a little differently from what Luke Bayes said in his comment. With these files:
# test.rb
puts __FILE__
require './dir2/test.rb'
# dir2/test.rb
puts __FILE__
Running ruby test.rb will output
test.rb
/full/path/to/dir2/test.rb