One-click Installer (ruby186-25) not installing gem

Windows XP SP2
New to ROR

Every note I've found about installing Ruby on Rails on Windows using
the one click installer from suggests that it
seamlessly also installs rubyGems. But after I run the installer and
open a command window,

ruby -v returns "ruby 1.8.6 (2007-03-13 patchlevel 0) [i386-mswin32]"

gem -v returns "c:/ruby/lib/ruby/site_ruby/1.8/rubygems/config_file.rb:
id argument - "C:\WINDOWS\DESKTOP\"/.gemrc (Errno::EINVAL)" and more
lines about not being able to open the file.

Should I be defining a .gemrc file somewhere, or can I modify a config
file somewheret to point to whereever it should be and, if so, where
might the correct file be?

So far, I've modified the PATH environment variable to be c:\ruby\bin
and every variation I can think of, with no luck.
The RUBYOPT environment variable was "-rubygems"; I tried changing it
to c:\ruby\lib\ruby with no luck there either.

I'd appreciate any help. Thanks.

Anyone have any insights into what might be not happening correctly on
install? I've tried uninstalling and re-installing several times with
no change.