As for me it is a bad idea to start updating your project from ruby. Update Rails version first. Then replace all plugins with gems in your Gemfile. Ruby 1.8.7 is supported up to rails3.2. After you update rails and gems you can start updating ruby version. I am saying this from ,my own experience, I had updated a Rails2.3/ruby 1.8.7 app to rails4.0.0/ruby 1.9.3
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