Install the GeoKit gem and the Rails plugin:

sudo gem install geokit
script/plugin install git://github.com/andre/geokit-rails.git

Edit config/environment.rb:

Rails::Initializer.run do |config|
  config.gem "geokit"
end

Generate a model and migration file with script/generate model Place:

class CreatePlaces < ActiveRecord::Migration
  def self.up
    create_table :places do |t|
      t.string :name

      t.string :external_id
      t.string :external_type

      t.decimal :latitude,  :precision => 15, :scale => 10
      t.decimal :longitude, :precision => 15, :scale => 10

      t.timestamps
    end

    add_index :places, :latitude
    add_index :places, :longitude
    add_index :places, [:latitude, :longitude]
  end

  def self.down
    drop_table :places
  end
end

Configure GeoKit:

class Place < ActiveRecord::Base
  acts_as_mappable :default_units => :kms, 
                   :default_formula => :sphere, 
                   :distance_field_name => :distance,
                   :lat_column_name => :latitude,
                   :lng_column_name => :longitude
end

Use your GeoKit enabled model:

Place.find_within(105, :origin => Place.last)