The current popular options for ruby development are TextMate and RadRails. TextMate is a very popular editor that provides keyword highlighting and integrated test execution. TextMate is very extensible and allows for a high level of customization. TextMate appears to be the popular choice for Mac OS X users. Unfortunately, it is only available for Mac OS X. Also, it's not specific to ruby and it is only an editor.
RadRails also provides keyword highlighting and adds a few capabilities such as the ability to start and stop webrick, generators, and other various short-cuts. RadRails is built on the Eclipse RCP. RadRails is considered an IDE because of the additional features. Some of my co-workers find the auto-completion helpful; however, the majority of features didn't really help me; therefore, I consider it basically just another editor. Of course, often you get what you pay for.
There are other editors in the ruby space:
- ActiveState: Komodo
- RIDE - ME
I would love to see JetBrains move into the ruby space, but I'm not holding my breath. Can you imagine developing a large C# or Java application without a great IDE? Ruby is simple enough that it is possible to develop a large application simply using TextMate; however, an IDE that added refactoring support would certainly improve productivity.