Make sure you install the devkit (ticking the checkboxes that will update the path) :
You might need to reinstall ruby too.
Install the DevKit
Download Development Kit from here http://rubyinstaller.org/downloads/
DevKit url at this time For use with Ruby 1.8.7 and 1.9.3: DevKit-tdm-32-4.5.2
For use with Ruby 2.0 and above (32bits version only):
DevKit-mingw64-32-4.7.2
For use with Ruby 2.0 and above (x64 – 64bits only)
DevKit-mingw64-64-4.7.2
Follow instructions here.
Or short instructions :
Unzip the zip
open command-line and go to unzipped folder
ruby dk.rb init
ruby dk.rb install
gem install rdiscount –platform=ruby