Got two comments about this, one of frustration at missing the keynote, one requesting more detail, so, here we go.
Avi basically said:
I'm from the future, I know how this story ends. All the people who are saying you can't implement Ruby on a fast virtual machine are wrong. That machine already exists today, it's called Gemstone, and it could certainly be adapted to Ruby. It runs Smalltalk, and Ruby essentially is Smalltalk. So adapting it to run Ruby is absolutely within the realm of the possible.
He also pointed out that the Strongtalk Smalltalk VM had incredible performance, although Evan Weaver later told me that the Strongtalk VM was never actually finished. The Strongtalk site confirms this, although I get the feeling that they did get most of the heavy lifting out of the way.
Anyway - going back to the summary - Avi was also saying that since Ruby is so similar to Smalltalk, and Smalltalk has unparalleled GUI and IDE support, it's pretty easy to see a future where all these tool vendors and IDE creators really come up with something incredible by simply going back to Smalltalk and mining it for all its lost riches. There was a real Raiders of the Lost Ark vibe to Avi's talk, or a Tomb Raider (the game) vibe, because he knew where to find this stuff, and he knew it could be repurposed, so it really is there, and all we have to do is go and get it. There's very fast VM technology out there which is totally capable of handling Ruby's dynamic features, because it can handle Smalltalk's dynamic features, which are exactly the same features, and it's absolutely possible to build a fully graphical environment for such a language, because that's what Smalltalk is.
He specifically highlighted comments from Tim Bray, who had said that building a competitive VM for Ruby could never really happen, because of specific dynamic features of Ruby. He also got a comment from somebody in the audience who had worked on a Smalltalk VM, and who said that enabling that dynamicity was a hard thing to do. The person was wearing a Powerset T-shirt, so I think it was Josh Susser, but I don't know for sure. It's actually a really interesting question, but there are so many implementations of Smalltalk that I think Avi's point had to have had some strength to it. Now that I think about it, though, I really wish I'd found Josh and asked him about that. I also had been hoping to meet Avi, but couldn't find him after the presentation.
It was a pretty exciting talk; I just wish there had been people from Gemstone there to hear it. There were a lot of cameras and mixing boards at RailsConf, so I think there's a very reasonable chance that the keynotes will become podcasts, including video. Very worth the download if that happens.