http://www.redmine.org/projects/redmine/wiki/RedmineUpgrade mentions it, but doesn't tell me what it is or how to find out what its value is. That should be clarified on that page, please.
#1 Updated by Tom Rochette over 8 years ago
RAILS_ROOT is the folder which contains all of redmine's code. When you extract the zip/tar.gz you've downloaded to a folder, that folder location is the effective RAILS_ROOT for that application (which is in this case redmine).
For example, if you were to create /home/redmine and put all the zip content into it, then /home/redmine is your RAILS_ROOT.
In the case mentioned in the documentation, this step is to copy old files to the new install.