At vinsol, we did a rails project recently which uses Paypal Website Payments Pro web api for financial settlement. We wrote the code that integrates with paypal in a separate module for reusability.
We have released the module at Rubyforge under a project named vPaypal. It is available as a gem, so you can install it directly using ruby-gems.
We are highly indebted to Pranav Bihari for this blog post which helped us getting started on using Paypal api with ruby.
Also thank to Ritu, our lead Rails programmer who wrote the complete module.