I ran gem update --system to update to Rubygems 1.5.0 and after every time I run any bundle commands I get:
gem update --system
bundle
rvm/gems/ruby-1.8.7-p249/gems
You can also downgrade Rubygems, however this is less than ideal, but for legacy systems if you need a specific bundler version you will have to do this.
For example on the app I am working on at the moment we are using:
Ruby 1.8.6-p383 RubyGems 1.3.6 Bundler 0.9.26