Download from here, unpack onto a USB dongle.

You should have two directories, "bin" and "lib". You'll need to set some paths:

chumby: PATH=$PATH:/mnt/usb/bin
chumby: HOME=/mnt/usb

This will set up the bin directory on the dongle to be valid for executables, and for gem's settings.  The dongle includes a pretty complete Ruby 1.8.6 and sqlite3.  gem will only work for gems that are pure Ruby and do not require compiling.

Otherwise, the standard Rails stuff applies:

chumby: cd /mnt/usb
chumby: rails myapp
chumby: cd myapp
chumby: script/server

Obviously, you're not going to be running a massive, complicated web site on this - it's more of a hacking exercise.  I haven't done much in the way of testing, so "buyer beware!".  If there's anything obviously wrong, please let me know.

Included in the "bin" directory are many, many open source Flash utilies, including swfmill, mtasc, ming, and swftools compiled for the chumby.

Have fun!