I can confirm this bug as well in my Ubuntu 8.04.1. I'm using rubygems version 1.1.1-1~hardy1.
$ sudo gem update Updating installed gems Bulk updating Gem source index for: http://gems.rubyforge.org/ Updating actionmailer Bulk updating Gem source index for: http://gems.rubyforge.org/ Successfully installed activesupport-2.1.1 Successfully installed actionpack-2.1.1 Successfully installed actionmailer-2.1.1 Updating activerecord Successfully installed activesupport-2.1.1 Successfully installed actionpack-2.1.1 Successfully installed actionmailer-2.1.1 Successfully installed activerecord-2.1.1 Updating activeresource Successfully installed activesupport-2.1.1 Successfully installed actionpack-2.1.1 Successfully installed actionmailer-2.1.1 Successfully installed activerecord-2.1.1 Successfully installed activeresource-2.1.1 Updating rails Successfully installed activesupport-2.1.1 Successfully installed actionpack-2.1.1 Successfully installed actionmailer-2.1.1 Successfully installed activerecord-2.1.1 Successfully installed activeresource-2.1.1 Successfully installed rails-2.1.1 Updating ruby-debug Building native extensions. This could take a while... Successfully installed activesupport-2.1.1 Successfully installed actionpack-2.1.1 Successfully installed actionmailer-2.1.1 Successfully installed activerecord-2.1.1 Successfully installed activeresource-2.1.1 Successfully installed rails-2.1.1 Successfully installed ruby-debug-base-0.10.2 Successfully installed ruby-debug-0.10.2 Gems updated: activesupport, actionpack, actionmailer, activesupport, actionpack, actionmailer, activerecord, activesupport, actionpack, actionmailer, activerecord, activeresource, activesupport, actionpack, actionmailer, activerecord, activeresource, rails, activesupport, actionpack, actionmailer, activerecord, activeresource, rails, ruby-debug-base, ruby-debug -- To UNSUBSCRIBE, email to [EMAIL PROTECTED] with a subject of "unsubscribe". Trouble? Contact [EMAIL PROTECTED]