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Ola Bini (JRuby and ThoughtWorks) has written about the importance of Iron Ruby and how he fears it is going to take forever unless Microsoft changes how they do open source:

For example, what is a compliant Ruby implementation? Since there exists no spec, and no comprehensive test suite, the only way to measure compliance is to check how close the behavior matches MRI. But this have some problems too. How do you check behavior? Well, you need to run applications. But how do you get so far as you can run applications? What JRuby did was that we looked at MRI source code.

John Lam can not look at MRI source code. He cannot look at JRuby source code. He cannot look at Rubinius source code. If he does, he will be terminated.

So, the next best alternative: accepting patches from the community, which can look at Ruby source? Nope, no cigar. Microsoft is not really about Open Source yet. Their license allows us to look at their source code, and also to fork it and do what we want with it. But that's only half of what open source is about. The more important part is that you should be able to contribute back code without having to fork. You can't do that with IronRuby, since Microsoft is too scared about being sued for copyright infringement.

I am going to make a bold statement here. Under the current circumstances, I don't believe it's possible for John Lam and his team to create a Ruby implementation that runs Rails within at least 18 months. And frankly, that's not soon enough.

John and Jim and phenomenal at what they do, so I hope that: a) Microsoft does change their stance on open source. b) even if they don't John knocks it out of the park a la IronPython.