For auth: I highly highly recommend Sorcery. I personally despise Devise. Clearance from Thoughtbot is also good, however I haven’t spent much time with it. I hate Devise for one main reason – it tries to be too much. I don’t need Devise to build my views, I hate having to override Devise functionality – it’s just a sledgehammer against a fly. If you’re interested in Sorcery, there’s a great Railscast on it. Of course the Thoughtbot boyz can speak more about Clearance. You can also make your own system but I’ve found that when I do that, it pretty much ends up looking like Sorcery. So I don’t bother anymore.
As @joelq said, the User story approach is absolutely the way to go.
Personally what I do is write the story, write the test, get the test to pass, then after that, I’ll write more cards to do the "front-end-beautification’ That way, I have functioning features first, then beautiful functioning features eventually. I’m not great at front-end so if I were to do the styling simultaneously, I would likely never finish anything. I probably would recommend a hybrid approach – get the basic UX built as you work, but don’t stress the details of color scheme, exact layout until later. Because, I’ve found that the road to hell is paved with “good” design – meaning, what you think is good design, might actually change as you start to add new functionality. So I don’t want to burn a bunch of hours making a page “perfect” until I start to have a cohesive feature set. That way I can evaluate the UX holistically and THEN get into the details.
But please write tests! This way if/when you get a “front-ender” on board, you have tests to ensure that nothing gets broken when you start adding more design. It’s also a lot more fun to code that way because you aren’t chasing random bugs around the yard – the tests let you know what’s up.
I’m not a Thoughtbotter though, so I can’t vouch for my way being the “best” – but it works for me. Personally, I’m a form follows function person, so I like to get the function first and then figure out the best form later.