Found a fix on StackOverflow:

Answer repeated below:

"To fix this issue you need to update MacRuby to the latest build which would be the nightly build available there:

0.12 is about to be released (0.11 is going to be skipped), but the nightly build is very stable."
p. 29 of the text shows an icon for a MacRuby Application, however, in Xcode 4.3.2 after installing MacRuby 0.10, I don't see that option. Did I miss a step?
When I type "small string".capitalize into macirb I get: Small string

Only the first letter of the first word is capitalized.

When I type "small string".capitalizedStrng into macirb I get: Small String

The first of each word is capitalized.