The problem:
`gem install mysql` failed with a
can't find header files for ruby.
ERROR: While executing gem ... (RuntimeError)
ERROR: Failed to build gem native extension.
The problem seemed to be related with the fresh version of XCode 2.2, which introduces support for the intel architecture (Who needs that anyway).
Google Groups : comp.lang.ruby had the solution. Not pretty, but it works. Now one can continue hacking some RoR.
Works. Thanks.
Though I should note, that apart from the above post, the install went smoothly by issuing the following command as root:
gem install mysql — –with-mysql-config=/usr/local/mysql/bin/mysql_config