Yes, I tried that, except the directory that OS X's `gem` command installs into is not searched.

This is the output of `ruby -e 'puts $:'`:
`/Library/Ruby/Site/1.8`
`/Library/Ruby/Site/1.8/powerpc-darwin12.0`
`/Library/Ruby/Site/1.8/universal-darwin12.0`
`/Library/Ruby/Site`
`/System/Library/Frameworks/Ruby.framework/Versions/1.8/usr/lib/ruby/vendor_ruby/1.8`
`/System/Library/Frameworks/Ruby.framework/Versions/1.8/usr/lib/ruby/vendor_ruby/1.8/universal-darwin12.0`
`/System/Library/Frameworks/Ruby.framework/Versions/1.8/usr/lib/ruby/vendor_ruby`
`/System/Library/Frameworks/Ruby.framework/Versions/1.8/usr/lib/ruby/1.8`
`/System/Library/Frameworks/Ruby.framework/Versions/1.8/usr/lib/ruby/1.8/powerpc-darwin12.0`
`/System/Library/Frameworks/Ruby.framework/Versions/1.8/usr/lib/ruby/1.8/universal-darwin12.0`
`.`

and `gem environment`

`- INSTALLATION DIRECTORY: /Library/Ruby/Gems/1.8`
`…`
`- GEM PATHS:`
`     - /Library/Ruby/Gems/1.8` this is where it got installed
`     - /Users/Habib/.gem/ruby/1.8`
`     - /System/Library/Frameworks/Ruby.framework/Versions/1.8/usr/lib/ruby/gems/1.8`