Issue #1668 has been updated by Kristian Mandrup.


Turns out the fix is here:
http://blog.orangecabin.com/2009/05/install-ruby-1-9-on-windows-using-zip-binary/

Download the file
First you download the 1.9 package from http://www.ruby-lang.org/en/downloads/
Choose °»Ruby 1.9 xxx binary°… instead of °»Ruby xxx Installer°….

Install it
Just Unpack the zip to c:\ruby.
Then add c:\ruby\bin to windows PATH.
Open a windows command console and type
gem update --system
Oops, it is broken! The binary is missing some dll files.

Let us fix it
zlib

Download zlib windows binary from
http://gnuwin32.sourceforge.net/packages/zlib.htm

unzip the package, then find a file named °»zlib1.dll°….
Copy °»zlib1.dll°… to your ruby\bin directory AND rename it to zlib.dll
What the heck?! Why renaming it? Because ruby source code reference the dll as zlib.dll. It is common to use alias like this on Linux. Ruby source was coded on Linux.

openssl

Download openssl windows binary from
http://gnuwin32.sourceforge.net/packages/openssl.htm
Unzip it.
Find °»libeay32.dll°…, copy to ruby\bin. Don°«t rename it.
Find °»libssl32.dll°…, copy to ruby\bin and rename it to ssleay32.dll

readline

Download readline windows binary from
http://gnuwin32.sourceforge.net/packages/readline.htm
Unzip it.
Find °»readline5.dll°…, copy to ruby\bin and rename it to readline.dll

Done

That is all. Now type
gem update --system
then
gem install rails

It works :)

Would be nice if these renamed DLLs were included with the ruby binary zip and also included a small install note for windows. 
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http://redmine.ruby-lang.org/issues/show/1668

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