Great both for people new to the language and those looking to strengthen their foundations.
Start with Michael Hartl's Rails Tutorial . I went through the rails 3 version with zero knowledge of ruby and you should feel very comfortable with the basics when you are done.
After that I read The Well-Grounded Rubyist . Having used some ruby now I found the book easy to get into. It's a little dated but should still cover everything you need at this point.
Lastly I read Eloquent Ruby . I highly recommend this book and is easily my favorite programing book.
Book-wise, you can't go wrong with The Well-Grounded Rubyist (http://www.amazon.com/The-Well-Grounded-Rubyist-David-Black/...) to begin with. I found it a lot more approachable than the Pickaxe book early on.
Good luck, Ruby was my first language and I learned a lot about learning programming languages from that experience.
While you await delivery of your books, also check out Mr. Neighborly's Humble Little Ruby Book. It's a solid introduction to Ruby. http://www.humblelittlerubybook.com/book/html/index.html
Download the Ruby Koans. All you need to do is run "ruby path_to_enlightenment.rb" from the command line. It'll tell you what line number in what file you need to change to complete each step. It's up to you to come up with the solution. There are 287 steps towards enlightenment. This is a great way to get "on hands" experience with and to learn a great deal about the Ruby langauge. http://rubykoans.com/
Rails starter material
That said, the Pragmatic Programmer's book Agile Development with Rails is a pretty good intro: http://pragprog.com/titles/rails3/agile-web-development-with...
But, with Rails 3 (with many changes) coming in the next few months, books are going to become outdated yet again.
As for Ruby in general, the fairly recent The Ruby Programming Language (http://www.amazon.com/Ruby-Programming-Language-David-Flanag...) is a pretty good intro. David Black's The Well-Grounded Rubyist (http://www.amazon.com/Well-Grounded-Rubyist-David-Black/dp/1...) is recent, and I'm sure a great book, as his previous (Ruby for Rails) was excellent.
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