I'll just show you an example. Let's say you wanted to nest a city inside of a state, like:
http://localhost/states/1/cities/3/
To nest the resources, you need to...nest them...in routes. 
Like this:
map.resources :states do |state| state.resources :cities end
Then, to add custom methods to each member (for example, if you wanted to show the population for a city or something), then you would do something like this:
map.resources :states do |state| state.resources :cities, :member => { :population => :get } end
...where population is the action name and get is the HTTP method you want to allow to be used on it. You could also do collection in the place of member to allow things like http://localhost/states/3/cities/average_population or something.
Keep in mind that when you nest resources, though, it also requires you call url_for/link_to with nesting. For example, rather than...
city_path the_city_id
...you need to do something like this:
state_city_path the_state_id, the_city_id
This also applies to custom methods.
Hopefully that will give you enough to get going.
--Jeremy
