Ah, I guess the problem is in the paths!
I have changed the standard "gem" command to work by default with
Passenger. So, I guess, I should update the Passenger now?

Here is an output of your commands:

$ gem list -l
...
rubygems-update (1.3.1)
...
$ gem environment
RubyGems Environment:
  - RUBYGEMS VERSION: 1.2.0
  - RUBY VERSION: 1.8.6 (2008-08-08 patchlevel 286) [i686-linux]
  - INSTALLATION DIRECTORY: /opt/ruby-enterprise-1.8.6-20080810/lib/
ruby/gems/1.8
  - RUBY EXECUTABLE: /opt/ruby-enterprise-1.8.6-20080810/bin/ruby
  - EXECUTABLE DIRECTORY: /opt/ruby-enterprise-1.8.6-20080810/bin
  - RUBYGEMS PLATFORMS:
    - ruby
    - x86-linux
  - GEM PATHS:
     - /opt/ruby-enterprise-1.8.6-20080810/lib/ruby/gems/1.8
  - GEM CONFIGURATION:
     - :update_sources => true
     - :verbose => true
     - :benchmark => false
     - :backtrace => false
     - :bulk_threshold => 1000
     - :sources => ["http://gems.rubyforge.org/";, "http://
gems.github.com"]
  - REMOTE SOURCES:
     - http://gems.rubyforge.org/
     - http://gems.github.com
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