Gem.bin_path LoadError - gem bin directories are not found

I installed ruby gems and have been working with rails just fine. Now,
this example (step 6) is giving me trouble:

Step 6 says to run appcfg.rb … That was not in my path. So after some
searching I found and added this directory to the path:


Now it is found, but obviously I’m still setup in-correctly because this
just leads me to a LoadError thrown from a call to Gem.bin_path …

“no such file to load”

The file it is complaining about is in a ‘bin’ directory nested even
deeper under another gem in /var/lib/gems. At this point, I probably
shouldn’t keep adding bin directories to my path. I’m sure that is not
the answer.

I would really like to see rails working under rails-primer in the App
Engine. Thanks for the help.