your post says:
  'You're running:  ruby 1.8.4'

while on ror.org is written:
  'We recommend Ruby 1.8.7 for use with Rails.'

1.8.4 should work, too. but to make sure it ain't a version-conflict,
i'd update.

other than that, did you follow this hint?:
  'OS X 10.5: Included with developer tools (then do "gem update
rails")'
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