<p>Is there a .NET Framework compiler for the Ruby language? I've heard of the DLR (Dynamic Language Runtime), is this going to enable Ruby to be used with .NET development?</p>

Yep, the Ruby.NET project
.  Note, it hasn't been updated since November 2007, so I'm not sure what the support's like now.
Edit: As others have pointed out, IronRuby is supported by Microsoft, so it's probably a better idea