paypal integration with rails project

most likely you want to use the ActiveMerchant plugin.
I havent done this with paypal yet, but there are loads of
information on this on the web

google: ActveMerchant paypal
http://wiki.rubyonrails.org/rails/pages/Active+Merchant+PayPal+Tips
http://www.coryperry.com/2008/01/18/setting-up-paypal-with-active-merchant-in-ruby-on-rails/
http://capturedsparks.com/entries/20-activemerchant-paypal-and-rails