ActiveRecord depends on and bundles Transaction::Simple in it's vendor directory. Unfortunately the packaging is incomplete and results in pain and warnings for those who are trying to use AR and the complete Transaction::Simple package together. François Beausoleil brought this up on the mailing list and David Heinemeier Hansson responded that it would be resolved, though probably not until Rails version two.
Discussion from the mailing list:
http://lists.rubyonrails.org/pipermail/rails-core/2006-March/001187.html
http://lists.rubyonrails.org/pipermail/rails-core/2006-March/001188.html
This patch offers an interim solution by modifiing active_record/transactions.rb to not load the bundled version if Transaction::Simple has already been defined. Authors who require the complete package need only require 'transaction/simple' before require(ing) 'active_record' in their scripts.