Not sure what's going on here, but in my Rails 3 application, I type bundle install and at the end if says Your bundle is complete! It was installed into ./runner.
Weird because I have no idea where runner is coming from!
If I recall correctly, if you run something like bundle install ./runner it will remember the path ./runner. bundle install --system should fix it. i think.
See the manpage:
--path=<path>
The location to install the gems in the bundle to.
This defaults to the gem home, which is the location
that gem install installs gems to. This means that, by
default, gems installed without a --path setting will
show up in gem list. This setting is a remembered option.
--system
Installs the gems in the bundle to the system location.
This overrides any previous remembered use of --path.