You're probably not going to like this answer but if you go:
https://github.com/oneclick/rubyinstaller/wiki/Development-Kit
like it says in the message it actually helps you quite a bit.
It tells you to install the Development-Kit then cd to the directory that you put it the run “ruby dk.rb init” and “ruby dk.rb install” and when it finishes then you can run "gem install rails" and it simply works.
Easy to miss as I didn't see it the first time either
