C:\ruby\bin (assuming the default instal location) isn't on your system path. The installer should have added it to the path, but I've seen this failure before.
Right click on "My Computer" and choose Properties, then on the Advance tab click on "Environment Variables". Check the system path and make sure c:\ruby\bin is there. If not, then add it. In either case, its safest to reboot next because sometimes it won't show up in the console window until after a reboot (altough most of the time it will).