When I read about this feature in the Help I thought it was pretty neat. For me (3.0) selecting a code snippet works for IRB but not for Rails. I have tried this with both consoles open. When I actually copy the selected Rails code and paste it into the Rails console it works fine.
Not that big of a deal (it just saves a Copy and Paste), but just thought you'd like to know. (Or maybe I'm doing something wrong.) (Again. :))