Jammit is a great Rails plugin for packaging assets (javascript and stylesheet files). Its installation is as easy as gem install jammit. If you are on Rails3, you can add it to your Gemfile:

gem 'jammit', '~>0.5'

Next step is describing your assets in a yaml files with, optionally, some options:

embed_assets: on

javascripts:
  workspace:
    - public/javascripts/vendor/jquery.js
    - public/javascripts/lib/*.js
    - public/javascripts/views/**/*.js
    - app/views/workspace/*.jst

stylesheets:
  common:
    - public/stylesheets/reset.css
    - public/stylesheets/widgets/*.css
  workspace:
    - public/stylesheets/pages/workspace.css
  empty:
    - public/stylesheets/pages/empty.css

Then, you run jammit, it minifies the files, bundle them and put the compressed results in public/assets.

Last thing, you should use the new helpers to include your packaged assets in your Rails app:

<%= include_stylesheets :common, :workspace, :media => 'all' %>
<%= include_javascripts :workspace %>

For the minification of your Javascript files, you have the choice between YUI compressor and Closure Compiler, but in both cases, you have to take care of your javascripts. I have three example of gotchas that'll prevent the minifier to do its job (I have experienced them):

1. Using an already minified of your favorite framework ;

2. Forgetting a semi-colon in an inline function. Example taken from an old version of jquery.nano :

    $.each(keys, function () { value = value[this] })

The semi-colon at the end of line is optional, no problem with it. But the one inside the function is mandatory and you have to put it to satisfy the minifier:

    $.each(keys, function () { value = value[this]; })

1. Declaring a variable and naming with a reserved keywords like char (it's reserved as a future keyword by the ECMAScript):

    function hello(char) { alert("hello " + char); }

will fail with some mysterious error messages.

But, using jammit and fixing these problems (if you encounter them) don't take too much time and it's worth it.