So my work took my away from Watir and Ruby stuff for a few months, but now I'm back at it, so I fired up a fresh system and installed the trial of 1.4 and I must say it's working MUCH better with the Watir browser driver stuff these days.
I've got two issues however.
1) a boss obsessed with 'free' being better, and wants me to consider using something called Eclipse.. not sure if you can give me things that RiS can do that it can't, but if you have any comparison of the two tools it might help.
2) when dealing with a HTML reporting class that defines some really long multiline strings, the color-coding stops working and it's like it never see's the closing single quote that ends the string.. so all the rest of the class ends up in one color (dark red?) as if it were part of a quoted string. The string is pretty long and contains a bunch of HTML code for the page that gets built up eventually by writing these strings out to a file.
The class in question can be found on one of the watir examples pages http://wiki.openqa.org/display/WTR/HTML+report+class
(or I can send it to you if you want). All you need to do to see the problem is copy the code from the wiki page and paste it into a new code file in your project.