While installing Rails and friends using something like MacPorts may prove to be a little less time consuming and less error prone, I think installing from source is the way to go.  Dan Benjamin, over on Hivelogic, has an excellent tutorial that steps you through all the steps to pull down and compile the source for Ruby, Rails, MySQL, Subversion, and Mongrel.  Over the last couple hours, in between a bunch of other things I've been doing, I walked through Dan's install guide and I'm happy to report everything went very smooth!  If you do decide to go the MacPorts route, I've been told, that James Duncan Davidson's tutorial is where to go.