In this talk Glenn Vanderburg, Relevance, discusses what the Ruby community has learned about building DSLs, and shows how to build state-of-the-art DSLs without going overboard.
Glenn explains some issues that can come from using internal DSLs, such as overestimating what they can do. He goes on to explain some examples of Ruby DSLs, such as Mathieu Bouchard's X11 library, which uses a DSL to write code that resembles the formal specification in Ruby code.
After some further examples, Glenn shows how Ruby compares to other languages when it comes to working with DSLs.
Glenn also mentions some work by Rich Kilmer on DSLs. InfoQ has a great presentation by Rich Kilmer on DSLs.
Watch Glenn Vanderburg on "The State of the DSL Art in Ruby".