<p>Is it currently possible with pre release of ironruby to run rubygems? It seems as if I have to set an environment variable to find them? </p>

if you set ENV['GEM_PATH'] correctly before using rubygems, then gems will work
sometimes
under IronRuby.  I'm actually looking at fixing this right now.
Also, this kind of question is probably better suited for the
IronRuby mailing list
than it is for StackOverflow.