I recently wanted to update my gem bundle but ran into installation problems with libv8 (requirement for therubyracer):
Installing libv8 (3.3.10.3) with native ext
I've run into the same issue recently. Here is a bit of helpful information from the RoR.org 'Getting Started with Rails' Guide:
Compiling CoffeeScript to JavaScript requires a JavaScript runtime and the absence of a runtime will give you an execjs error. Usually Mac OS X and Windows come with a JavaScript runtime installed. Rails adds the therubyracer gem to Gemfile in a commented line for new apps and you can uncomment if you need it. therubyrhino is the recommended runtime for JRuby users and is added by default to Gemfile in apps generated under JRuby. You can investigate about all the supported runtimes at ExecJS.
Based on what I've read elsewhere it seems that Windows support for the therubyracer gem is not there in the '3.3.10.4' version (possibly there in a more recent version, didn't read in that far though). I've installed python 2.7 and got it to compile but you still get errors later during the environment setup process.
So it comes down to this. Check out therubyracer documentation here. 'therubyracer' provides these features (:
If you ABSOLUTELY REQUIRE those features then you should switch to *nix and drop Windows for a development/production environment. Otherwise you can do what I did and choose not to install 'therubyracer' or 'libv8' (removed from my Gemfile). I don't rely heavily on JavaScript with the site I'm experiencing this problem with, so I just ignored both gems and all seems well (so far).
Hope this helps someone else in need!