If your main goal is to teach, you can try using Hackety Hack. From time to time it is somewhat weak, but I found it funny and easy to use, but then I already knew the ruby ββwell.
For beginners who can easily run programs, it is very important, so you need something where irb and ruby ββcan be run very simply. Aptana seems to be a pretty good environment for this kind of thing, but I never used it for website development.
Besides these two, I suggest Notepad ++ ... Free KomodoEdit may also be interesting. Personally, I say teach another person emacs, but then shrugged again
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