How do I validate that two values do not equal each other in a Rails model?

Create custom validataion:

validate :check_email_and_password

def check_email_and_password
  errors.add(:password, "can't be the same as email") if email == password
end

But keep in mind that storing password as a plain text is bad idea. You should store it hashed. Try some authentication plugin like authlogic or Restful authentication.