> Now if you modify the Ruby interpreter and do not release the source of  
> it, it can be as obfuscated as you can make the decryption piece in the  
> binary of your new interpreter. As soon as someone figure out your  
> encryption scheme, he/she can compile a ruby interpreter of their own to  
> spit out the code just before it is executed...
>
Well PGP is available as source - and it seems to provide pretty  
encryption via the use of certificates. Sure you could alter the  
interpreter to save the source before execution - but that would only help  
if you were an authorised user with a valid certificate to run the  
encrypted codebase - and if you had this - why would you want to pirate  
the source anyway as you had already "bought" it?

Graham