You might want to look into using svn:externals property on vendor/plugins.
It lets you connect your svn repository to external code sources, and also
lets you lock to a specific version -- Rails 1.1.6, 1.2.2, or whatever. If I
understand what you're trying to do correctly, changing the Rails gem when
you upgrade should be as simple as changing the svn:externals property to
point to the new version. I use this method to manage Acts_As_Ferret and a
few other plugins, works for me. Some urls: