I ran gem update --system to update to Rubygems 1.5.0 and after every time I run any bundle commands I get:
rvm/gems/ruby-1.8.7-p249/gems
Re: "just Update to bundler 1.0.10." — Note that you can't necessarily get the new version simply by doing
sudo gem update
You'll need to fully uninstall your current bundler, ignore the warnings about the dependencies it breaks, and then re-install it. That fixed my Bundler 1.0.7 and got my system working again.