Join the Xiki google group and we'll get your problems fixed! The install has been tested on Lion and the latest Ubuntu and there are some reports of success. A few weeks back we shifted gears to get "gem install xiki" working and improve the install process.
The installation appeared to proceed successfully, but when I started emacs, I got errors about "ignore-errors" being void, and there was also an error in one of the various buffers about not being able to find "el4r-setup". I'm running OS X Lion, I created a new rvm gemset with 1.9.2-p290 to do the gem installation, and I didn't have to "sudo" anything for any of the installation steps.
Also, your install documentation could do with more hints on what to do once it's installed to figure out whether it's working or not. I started emacs, typed "ls" and double-clicked it, but I had (and have) no idea whether nothing happened because I was doing something wrong, or because it was broken.