I have a Rails 3 app ready for staging.
I haven\'t got a VPS host set up yet. As I was planning to have everything on shared host for the first few months.
Found some random blog. It had some lines that went in 'config.ru', that seemed to work for me.
ENV['GEM_HOME'] = '/home/farleyknight/.gems' ENV['GEM_PATH'] = '$GEM_HOME:/usr/lib/ruby/gems/1.8' require 'rubygems' Gem.clear_paths
Maybe it will work for you..