Given that RAILS_CONNECTION_ADAPTERS went away, the IBM gem is no longer called "ibm_db2", and that the minimum software requirements have changed, I recommend skipping the "Toolkit for DB2 on Rails" and to start learning about the "ibm_db" gem here: http://rubyforge.org/projects/rubyibm
N.B. The unwarranted license of DB2 Express-C is currently limited to using 2 processor cores & 2 GB of memory. However, it's still a better option than "Oracle XE".