There are a number of options. Most Rails developers seem to prefer lighterweight options like TextMate. There's also a great Rails.vim plugin if you're a Vi sorta guy.
If you're looking for a more heavyweight traditional IDE, I can heartily recommend NetBeans, which has evolved to have phenomenal Ruby/Rails support. Other options include Aptana/RadRails (Eclipse-based), IntelliJ, and Komodo.
Joined: Sep 01, 2008
Btw, NetBeans is available free of cost. I'd start there if you're looking for a traditional IDE. Rails.vim is also free, of course.