  Relying on the inhomogeneous (layered) crystal, electronic, and magnetic
structure, we show how superconductivity can coexist with the ferromagnetic
phase of RuSr2GdCu2O8 as observed by Tallon and coworkers. Since the Cu
d_{x^2-y^2} orbitals couple only to apical O p_x, p_y orbitals (and only
weakly), which also couple only weakly to the magnetic Ru t_{2g} orbitals,
there is sufficiently weak exchange splitting, especially of the symmetric CuO2
bilayer Fermi surface, to allow singlet pairing. The exchange splitting is
calculated to be large enough that the superconducting order parameter may be
of the Fulde-Ferrell-Larkin-Ovchinnikov type. We also note that \pi-phase
formation is preferred by the magnetic characteristics of RuSr2GdCu2O8.
