If you've installed Ruby and Rails using mac ports, be aware that
installing 10.5.3 will install new versions of ruby and rails, which
will hide your mac ports versions of rails.
I had to go into /usr/bin and reset/delete a whole bunch of symlinks.
I haven't upgraded yet, but I doubt there's a problem with 10.5.3 and
Ruby. Instead, I think there may just be an issue with your path. As
long as you have /opt/local ahead of /usr/bin on your path, you should
be able to have both Ruby installs co-exist peacefully.