I have installed gem on Ubuntu 10.10 32 bit with
apt-get install gem -y
But when I try to run
gem install something.gem
The following command will give you the list of files that the gem package installed:
dpkg -L gem
that should help you troubleshoot.
Are you wanting ruby gems? If so, you need to install libgemplugin-ruby and then the ruby 'gem' program will be in your path:
aptitude install libgemplugin-ruby