[Rails] Re: Rails server comand won't start server: creates new directories

> Was working yesterday and now doing this.

Probably yesterday you installed rvm and switched to rvm 1.9.2 with new
rails 3. When you logged in today your rvm, it used as default system's
ruby which contains rails 2.x.
Use this command to make your ruby 1.9.2 + rails3 environment default
one for rvm

rvm --default use 1.9.2

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http://blog.eugen.co

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