How to enable website users to transact with each other using bitcoins?
You need to set up bitcoind and look into accounts. If you want users to be able to pay each other in the system for anything, it is quite easy to move Bitcoins around without creating transactions simply by calling the move API. After that you just need to add the options for users to put money into their accounts and withdraw them, and you are set.

Can't really help you with Ruby-specific things though, as I don't know the language.