Apparently you can only update ruby gems from the repositories. What I
have done was install it from source. Just grab the source and install
it. It will overwrite the existing one.
I don't know if anyone else has another solution, but that is the one I found.
Additionally, Mark, don’t use ruby 1.9.1 with rails: it’s buggy.and it’s not recommended, as mentioned on RoR home page. Consider compiling ruby from source, either version 1.8.7 or 1.9.2. Follow the step by step instructions from Ruby official site if in doubt. Install RubyGems manually afterwards by running the install script form their official page:
http://rubygems.org/pages/download
As a third step, just install rails as a gem. I’,m also using Ubuntu as a development environment and I recommend you to keep up-to-date on your tools by following this install path. The repositories are lagging behind.