A couple of things.
First Oracles JDK typicality just unpacks the files but doesn't do a full setup. You'll need to make a link in /usr/bin to where ever you installed it. Not on my Ubuntu machine ATM so I can't give you the exact paths etc. but if you need help I'll post when I'm back on it. You might want to just try OpenJDK.
As for IDE's you have a number of choices.
Free:
Netbeans - Version 7 doesn't support ruby/rails any more so you are limited to 6.9
Aptana Studio 3 or Titanium both work great with rails apps. Titanium adds lots of mobile support as well as web apps so nice if you plan to do any of that in the future. Both are based on Eclipse and can be installed as standalone apps or plugins to Eclipse.
Gedit plus plugins. There are a number of plugins available for gedit to make it work better as a full fledged IDE.
There are a bunch of there text editor ones also but I generally don't consider then true IDE's though still very good for development work.
Pay:
Jetbrains RubyMine - a very good IDE but does cost a few $$.
Personally I've used RubyMine for the last year and liked it a lot however recently I've been playing around with Titanium and am liking it a lot also. I've used Netbeans in the past but when they dropped ruby/rails I dropped it.
Bob