Here is a complete guide to setting up watir.
1. Download ruby-one-click setup from RubyForge , take care that the gem you downloaded supports this version of Ruby. You will find the gem and ruby setup compatibility information at http://watir.com/installation/
2. Download the stable watir gem. I downloaded rubyinstaller-1.8.6-p398 in order to work with my watir 1.6.5 gems . [Common watir, firewatir and Watir] as both were compatible. Earlier I had installed ruby 1.9.1 but it dint work with watir 1.6.5 . I got the error "msvcrt-ruby18.dll not found" as the version required was much lesser.
3. Install ruby and keep all the gems in one folder.
4. Open command prompt[cmd from run] and then cd to the folder where the gems are located
5. Here run the commands:
D:\mygems> gem install commonwatir-1.6.5.gem
D:\mygems> gem install watir-1.6.5.gem
D:\mygems> gem install firewatir-1.6.5.gem
3. If you are behind a proxy, you will have issues finding the dependent gems. This will result in the error http://rubygems.org/ does not appear to be a repository
To resolve this issue, you will need proxy bypass until you have it install. If you have a machine that you can use as a proxy, you can specify it in command as: