I would like to run Ruby code from a ZIP file directly rather than
extracting the contents of the ZIP into a folder and run from there.

I am familiar with the work done by this person:

 http://www.erikveen.dds.nl/tar2rubyscript/index.html
 http://www.erikveen.dds.nl/distributingrubyapplications/index.html

However I find those techniques to be too limiting for my purposes.

Eventually I would want to be able to run Ruby code from an encrypted
ZIP file as a Windows app - I don't care about Linux or Unix as there
are methods for getting Windows apps running from Linux or Unix
natively (see also WINE).

The work of erikveen (see above) is interesting only because that
approach does not attempt to make the Ruby source code encrypted only
to misdirect the novice user from the actual location of the source
code while the app is running however if the user happens to go poking
around their temp folder while the app is running they get to see the
Ruby source and this is unacceptable to me.

I would have thought someone might have done this already however so
far I have not been able to find that someone.

BTW - Python allows this already in version 2.5.1 aside from the being
encrypted part.