If you are looking for a lightweight and elegant single sign-on solution for your Rails applications, you may want to have a look at the rubycas-server project.

As the name implies, it's a Ruby implementation of the Yale University CAS protocol which is open, standard-based (HTTP, SSL and a pinch of down-to-earth XML) and already available for a wide assortment of other platforms (Java, PHP, Python, ...). The setup of rubycas-server is straightforward, it supports several authentication back-ends out of the box (SQL, ActiveDirectory, LDAP) and writing a custom authentication handler is a breeze.

If you look at the client-side, it's at least as good: the rubycas-client plugin for Rails is simply amazing. The code is clean and ut just handles everything for you. I basically added 2 lines of configuration, changed 5 lines of code in a base controller and the whole authentication layer of my application was delegated to the CAS server.

Those two projects are definitely worth checking before you start rolling out yet another proprietary SSO architecture...