How to enable website users to transact with each other using bitcoins? I have a website which enables users to trade information for a price.
The price is calculated based on an algorithm within the website.
The website charges a percentage per transaction for the service.

I would like to know how to go about enabling the users to perform the transaction using bitcoins as an alternative to credit card transactions.

The website is coded in Ruby on Rails, I am currently investigating bitcoind, and the bitcoin-ruby library but I'm feeling a little overwhelmed with new technology. 

Could someone please explain how I might go this? I'm looking for an overview of the process.

For example: The website connects to a bitcoind server, and creates a unique wallet per user, then to provide transactions the users will need to transfer coins from somewhere to their personal website wallet. When the user wishes to purchase information from another user, the website then connects to the bitcoind and creates a transaction between the two wallets, and creates a second transaction to cover the website commision.

I've made up this example from my basic understanding of the system - but what security issues are involved in this. Will this approach work, or is there a better way?
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.