Hi,
before rails 2.3 the application controller was names application.rb but now
it's application_controller.rb
Like Dogwalker said, install also Gem version 2.2.2 of rails. There was also
a "alpha" patch for LBL for 2.3.2. See some posts before.

See also (
http://guides.rubyonrails.org/2_3_release_notes.html#application-controller-renamed
)

Cheers,
Chris

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