Running Instiki on Dreamhost has gotten much easier since they have added Passenger (mod_rails).
Create a new fully hosted domain on dreamhost. Something like wiki.domain.com.
This will create the wiki.domain.com folder in the user’s home directory. Login to your shell account and do the following:
cd wiki.yourdomain.com
svn checkout svn://rubyforge.org/var/svn/instiki/instiki/trunk/ instiki
cd instiki
rake db:migrate RAILS_ENV=production
Open wiki.yourdomain.com in your browser and set up the wiki.