
Beginning Ruby: From Novice to Professional (Beginning from Novice to Professional) (Paperback) http://amzn.com/1590597664
Simply Rails 2 by Patrick Lenz Permalink: http://amzn.com/0980455200
Head First Rails: A learner's companion to Ruby on Rails by David Griffiths Permalink: http://amzn.com/0596515774
Beginning Rails: From Novice to Professional (Beginning from Novice to Professional) by Jeffrey Allan Hardy Permalink: http://amzn.com/1590596862
I suggest you pick up a version control book as well: svn or git from pragmatic programmers, may as well get this part done early so it becomes transparent.
Good luck
The only caveat is that it was written for Rails 1.2.3. The book's site is http://beginningrails.com/ and the author replies regularly to questions about the book (or Rails in general) over at http://groups.google.com/group/beginning-rails
The Rails Way kicks ass once you already know Rails to a certain extent - it's definitely not a first book. It's a "bible" type book and is stuck somewhere back in Rails 2.1 land, I believe, but most of it still applies.
AWDwR is reasonable and mostly up to date (focused at Rails 2.2, as far as I recall) and particularly suited for people who are totally new to Rails.
My recommendation for people who are new to both Ruby and Rails is Foundation Rails 2 by Eldon Alameda as it has a 30 page primer to Ruby included and spends a long time "touring" Rails. It also covers RSpec which, given you're Agile, might be of significant interest to you.
Books I'd steer away from either because they're out of date or just plain bad IMHO would be all of the Packt books and Beginning Rails from Apress (the latter, hopefully, will be brought up to date in a 2nd edition).