Every time you change your Gemfile then you might adding/removing any dependancies in your application. Just bundle install will install gems for you. The output may look like

$ bundle install 
Fetching git://github.com/rails/rails.git
Fetching source index for http://rubygems.org/ 
Using rake (0.8.7) 
Installing abstract (1.0.0)
Your bundle is complete! Use `bundle show [gemname]` to see where a
bundled gem is installed.

You can specify groups for special environments

 
$ bundle install --without development test

$ bundle install --without test

You can specify installation directory for your gems. This will install all the gems into tmp/bundle folder

$ bundle install --path tmp/bundle

You can check your applications bundler config.

 
$ bundle config 

Settings are listed in order of priority. The top value will be used.

disable_shared_gems
  Set for your local app (/Users/arunagw/foobar/.bundle/config): "1"

path
  Set for your local app (/Users/arunagw/foobar/.bundle/config): "tmp/bundle"

For more details about bundler you can checkout http://gembundler.com/ And also http://railscasts.com/episodes/201-bundler