This is the big one. As tough as Emerald is, Ruby is tougher despite having 200,000 less HP. To even stand a chance, you need to enter the battle with two of your characters dead, otherwise Ruby will eject them from battle leaving one character. By starting off with two characters dead, Ruby will bypass this and go straight to burying his tentacles in the sand, preventing you from escaping the battle. Revive your team-mates, but do not rely on simply using the Knights of the Round. If you do, Ruby will counter with Ultima. Instead, make sure one character has the W-Summon (obtainable from the Battle Square in exchange for 64,000 BP), Hades, and KOTR, and make sure that the other two characters have Mime.
Use W-Summon and select Hades first and KOTR second. Hades inflicts several status effects, most of which Ruby is immune to. However, Ruby is NOT immune to paralysis, and using Hades will cause paralysis in Ruby, preventing him from counter-attacking with Ultima. Then simply use Mime. However, make sure to wait for Ruby to come out of paralysis every 3-4 turns, otherwise it might wear off during KOTR and he will counter-attack with Ultima. You will need a superlatively powerful party, all of whom should be level 99, level 4 limit breaks, and ultimate weapons, armour, and accessories. This strategy might be 'cheap', but it works. Ruby will drop a Desert Rose after defeating him which you can trade with the Kalm Traveller for a Gold Chocobo, although at that point, a Gold Chocobo is kind of redundant unless you somehow beat Ruby without using KOTR, in which case hats off to you.