-bash: rails: command not found

Shane, from that same directory type in
gem list

If it lists rails in the gems from that directory, you should be good
to go.
If the list is long, you can narrow it with:
gem list ra

That will only list gems starting with ra

You may need to set your paths.
This is important. double check it with the Hivelogic tutorial.
Also there is now a Ruby 1-click-installer for OS X
Regardless, you may likely have a path issue.