Blah, I had it 90% done and did something stupid to lose it. I think I may do a screencast instead as it'll explain it so much better. I'll skip on the installing Ruby/MySQL/Rails bit... even install Litespeed (it's so damn easy). It's just Litespeed itself which has really poor interface design, so it can be confusing at first.
In the mean time, I found this:
Web Development Blog: Web Development Insights, Best Practices, Tips & Techniques : Viget Labs