Think most of the people having difficulties to install Zurb Foundation 5. Ruby Error messages, "compass watch" not working etc. etc. I had the same issue last night but solved it myself.
This is a small guide, how to Install Zurb Foundation 5 properly in Windows 7.
1. Install GitAs per Zurb Foundation docs, the 1st thing is you have to install Git.
When installing, choose the 2nd option. (Run Git from Windows command prompt)
Then, manually set configure the Windows Path as follows. (System->Advanced System Settings->Environment Variables)
C:\Program Files (x86)\Git\bin;C:\Program Files (x86)\Git\cmd
This will not harm anything in your system, so no need to worry.
2. Install Ruby2nd thing as per the Zurb Foundation Docs.
Choose this version rather than the 2.00 or 2.00 64bit version. And if you installed any other Ruby version, uninstall it. (But remember the gems you have installed before)
Next Next Finish :)
3. NodeJsPretty straightforward.
4. Restart PCPath to npm will set when you install NodeJs.
5. Install Bower
6. Uninstall/ Install Foundation
If it said 0 gem uninstalled, then your foundation gem gone. What we have to do here is to install the new foundation as per the docs.
7. Install Compass
gem install compass