Michael Hartl's "Rails Tutorial" is generally considered a great book, not only for RoR but also more than enough Ruby to really understand it, plus good habits like testing (and tools to do it with). Best of all, it's free to use online! If you like hardcopy or ebooks you can get it that way too. See http://ruby.railstutorial.org/ for more info.
Rails Tutorial walks you through a fairly complete project. Other than that, though, "scratch your itch". Can you think of a relatively simple web-app that you wish existed? Maybe something similar to something that already exists, but with some feature added or change? Create it! To paraphrase Gandhi, write the app you wish to see in the world. :-)
