The Pickaxe is a vital reference book for anybody doing anything with  
Ruby.
After you read it and do some things, you can keep going back to it.  
(until you're an expert on Ruby, but even then...)
The tutorial/example section could use some clean up and I wouldn't  
expect anyone to rely on that alone, as it doesn't go deep into  
anything but the basics fo Ruby.
Beginning Ruby more than makes up for this, as a great tutorial of  
Ruby in many different use-scenarios.
The Ruby Cookbook can't be denied either.


As for Rails, AWDWR's second half should be had as a reference, but  
not until Rails 2 version is out. The tutorial portion is a mess but  
informative if you've first read other books on Rails.
I would recommend this as a reference, but to get your  hands dirty  
and get a good clear picture of the core day-to-day Rails life, get  
the SitePoint publishing book on Rails. It's quick, and clear and  
concise.
Rails Solutions is another good one for the quick and dirty.

Honestly, I haven't met a Ruby book I didn't like yet.