WARNING: These instructions are for Facebook version 1 (not Facebooker2). Since last year, I have moved toward using a different gem for this due to Facebooker's lack of documentation. Working on a new blog post detailing that.
So you want to write a Facebook app written in Rails? Well, the good news is that it works. The bad news is that out of the box Facebook didn't quite design their platform to work with some of the core concepts (namely, REST) of Rails.