While sleep(timeout) is perfectly appropriate for some designs, there's one important caveat to bear in mind.
Ruby installs signal handlers with SA_RESTART (see here), meaning that your sleep (or equivalent select(nil, nil, nil, timeout)) cannot easily be interrupted. Your signal handler will fire, but the program will go right back to sleep. This may be inconvenient if you wished to react timely to, say, a SIGTERM.
Consider that ...
#! /usr/bin/ruby
Signal.trap("USR1") { puts "Hey, wake up!" }
Process.fork() { sleep 2 and Process.kill("USR1", Process.ppid) }
sleep 30
puts "Zzz. I enjoyed my nap."
... will take about 30 seconds to execute, rather than 2.
As a workaround, you might instead throw an exception in your signal handler, which would interrupt the sleep (or anything else!) above. You might also switch to a select-based loop and use a variant of the self-pipe trick to wake up "early" upon receipt of a signal. As others have pointed out, fully-featured event libraries are available, too.