To create a new JRuby application with IntelliJ IDEA 7.0.4 and Ruby plugin version 1.5:
- In the New Project dialog, select "Create project from scratch"
- Select "Java Module" in the module type list
- Configure the source directory as desired
- Check the JRuby checkbox on the "Please select the desired technologies" list. Select the JRuby SDK to use, or press the ... button to add a new JRuby SDK and specify the JRuby installation location

- If Rails support is required in the application, check the "Rails" checkbox
- If necessary, specify additional settings for creating a Rails application by pressing the "More..." button