Helper methods defined in this test_helper.rb make test.log colorfull and allow to easy find specific test cases and failures. To log test names use following template for test method:

def test_creates_entry
  log_test_name
  # Rest of your test code goes here
  # ...
end

test/test_helper.rb

ENV["RAILS_ENV"] = "test"
require File.expand_path(File.dirname(__FILE__) + "/../config/environment")
require 'test_help'

module Test::Unit::Assertions
  def assert_block(message="assert_block failed.") # :yields:
    _wrap_assertion do
      if (! yield)
        logger.debug("\e[0;41mFailure:\e[m #{message}")
        raise Test::Unit::AssertionFailedError.new(message.to_s)
      else
        logger.debug("\e[0;32mSuccess\e[m")
      end
    end
  end
end

class Test::Unit::TestCase
  # Transactional fixtures accelerate your tests by wrapping each test method
  # in a transaction that's rolled back on completion.  This ensures that the
  # test database remains unchanged so your fixtures don't have to be reloaded
  # between every test method.  Fewer database queries means faster tests.
  #
  # Read Mike Clark's excellent walkthrough at
  #   http://clarkware.com/cgi/blosxom/2005/10/24#Rails10FastTesting
  #
  # Every Active Record database supports transactions except MyISAM tables
  # in MySQL.  Turn off transactional fixtures in this case; however, if you
  # don't care one way or the other, switching from MyISAM to InnoDB tables
  # is recommended.
  self.use_transactional_fixtures = true

  # Instantiated fixtures are slow, but give you @david where otherwise you
  # would need people(:david).  If you don't want to migrate your existing
  # test cases which use the @david style and don't mind the speed hit (each
  # instantiated fixtures translates to a database query per test method),
  # then set this back to true.
  self.use_instantiated_fixtures  = false

  def logger
    RAILS_DEFAULT_LOGGER
  end

  def log_test_name(test_name=nil)
    test_name = caller[0].match(/`(test_[a-z_]+)'$/) unless test_name
    logger.debug "\n\e[1m#{self.class}::\e[0;31m#{test_name}\e[m\n"
  end
end

class ActionController::Integration::Session
  def logger
    RAILS_DEFAULT_LOGGER
  end

  def log_step_name(step_name=nil)
    step_name = caller[0].match(/`(test_[a-z_]+)'$/) unless step_name
    logger.debug "\n\e[1m#{step_name}\e[m"
  end
end