I am currently having a problem when upgrading from version beta 20 to
2.0.1

class User 
  include Mongoid::Document 
  include Mongoid::Timestamps 
  embeds_many :my_relations, 
          :class_name => 'Relation' 
end 
class Relation 
  include Mongoid::Document 
  include Mongoid::Timestamps 
  # tried changing this to belongs_to 
  referenced_in :target, 
          :class_name => 'User' 
  embedded_in :owner, 
          :class_name => 'User', 
          :inverse_of => :my_relations 
end 

Some how this does not work even after changing the referenced_in
macro to 'belongs_to'.
In the relation model I am trying to keep track to which other user is
the current user referenced.
Every time I try to create a new relation I get an error
NoMethodError: undefined method `first' for #<Relation:0x7f325a0f3a78>
Any ideas as to what is going wrong..

It seems that there is no way out of the box to have one sided relationship from embedded object, on its own collection

Solution.... which i have right now..
I have solved this currently by removing referenced_in macro from relation model and adding a field target_id, and following methods for it.
def target=(user)
self.target_id = user.id
end

def target
@target ||= User.find(target_id)
end
with this the code worked..

uf = User.create!(:nickname =>'first')
ul = User.create!(:nickname =>'last')
uf.my_relations.push(Relation.new(:state => 'first', :target => ul))

Nick also had mentioned a solution on google group... which is as below..

The problem seems to be with the "target" association in Relation. If I set
a relation's "target", the error occur. However, if I set a relation's
"target_id", the error doesn't occur. Until this bug is fixed, you can use
that as a workaround. Eg:
u1 = User.first
u2 = User.new
u2.my_relations.create :target_id => u1.id
u2.save

Discussion on google group..
http://groups.google.com/group/mongoid/browse_thread/thread/fadd08bb1d0f5bc1