Thanks for the reply!

I uninstalled Ruby/Rails and reinstalled a 4.0.5 version and DevKit. 
Checked the version of rails and it was 4.0.5.

I ran: gem install hobo --pre

It automatically installed the following gems:

hobo_support-2.1.0
hobo_fields-2.1.0
activesupport-4.0.8
actionpack-4.0.8
dryml-2.1.0
hobo_will_paginate-2.1.1
hobo-2.1.0
activemodel-4.0.8
activerecord-4.0.8
actionmailer-4.0.8
railties-4.0.8

I checked my rails version again, and it is 4.0.8 (?)

Ran: hobo new agility

It returned the errors:

Error: Unable to activate rails-4.0.5, because activesupport-4.0.8 
conflicts with activesupport (= 4.0.5), actionpack-4.0.8 conflicts with 
actionpack (= 4.0.5), railties-4.0.8 conflicts with railties (= 4.0.5)

I'm a bit stumped.

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