I've done the process described bellow totally by hand. I'm sure that there is a better method out there, however that one worked for me.
Pre-reqs
You will have to have XCode installed in your Mac.
Update the Ruby
I've download the Ruby source code from :
http://ftp.ruby-lang.org/pub/ruby/1.9/ruby-1.9.2-p180.tar.gz
Untar the binarytar -xvf ruby-1.9.2-p180.tar.gz
Let's configure, make and make install ruby
that will install 1.9.2 in your Mac.
cd ruby-1.9.2-p180
./configure
make
make install
If you don't see any errors t you should see the new version on your Mac:
ruby -v
Let's install gem.. Ok, for each Ruby installation there is a exclusive gem installation for it.
So, even though you've done the ruby update you will still see that gem is using the old Ruby 1.8.7.
So, let's start installing gem
Download the source:
http://rubyforge.org/frs/download.php/74619/rubygems-1.7.2.tgz
# cd rubygems-1.7.2
ruby setup.rb
Now, let's remove the old gem...(As a good practice..take a backup first, we never know..)On my Mac gem was in /usr/bin/gem mv /usr/bin/gem /usr/bin/bk_gem.old
Let's link the new version
ln -s /usr/local/bin/gem gem
Now you should see the new gem version:
gem -v 1.7.2
Now, go ahead and install Rails 3.0gem install rails
One last thing..update rake as well :
sudo mv /usr/bin/rake /usr/bin/rake.old
$ cd /usr/bin
$ sudo ln -s /usr/local/lib/ruby/gems/1.9.1/gems/rake-0.8.7/bin/rake rake
That's it.. You've done the upgrade to Rails3 manually.