How to remove an item from gem PATH?

Question

I was trying to update Rails and I ran gem install rails from my home directory and I now have a .gem directory in my home dir.

I eventually was able to update Rails properly, and deleted the .gem folder, but I now have this extra PATH in my GEM PATHS that I wanted to get rid of:

  - GEM PATHS:
     - /Library/Ruby/Gems/1.8
     - /Users/homedir/.gem/ruby/1.8
     - /System/Library/Frameworks/Ruby.framework/Versions/1.8/usr/lib/ruby/gems/

How do I remove this? What is the "proper" way to remove this line? I haven't the foggiest idea. Running OS X 10.6.4, Ruby 1.8.7, Gem 1.3.7, and Rails 3.0.0.

I'm pretty new at this.