Can't get gems to work

I tried deleting the gem cache and updating gems but I get the following error:

[computer1][/]$ gem update --system Upgrading RubyGems... Attempting remote upgrade of rubygems-update Attempting remote installation of 'rubygems-update' Successfully installed rubygems-update-1.3.6 Installing RDoc documentation for rubygems-update-1.3.6... Could not find main page README Could not find main page README Could not find main page README Could not find main page README Updating version of RubyGems to 1.3.6 Installing RubyGems 1.3.6 ./lib/rubygems.rb:124: uninitialized constant Gem::RbConfig (NameError)         from setup.rb:24 RubyGems system software updated

I am thinking this might have something to do with the fact that I can't get gems to install anything withoug getting the error:

ERROR: While executing gem ... (Gem::GemNotFoundException)     Could not find paperclip (> 0) in the repository

Can anyone help me get this working, I'm at a complete standstill with developement?

thanks

jack