I solved my issue. It turns out that my configuration files were fine.
This issue was discussed in this thread:
http://groups.google.com/group/phusion-passenger/browse_thread/thread/dbb6711f24471527:

"Please make sure that your environment.rb is *not* owned by the "nobody"
user or by the "root" user.

This is actually a RubyGems 1.3 bug:
http://rubyforge.org/tracker/index.php?func=detail&aid=23105&group_id=126&atid=577";

Executing this command fixed the issue: chown www-data
/var/www/tracks/config/*

Interesting that the rails application worked when I configured tracks to
be my virtual host's root but not deployed to a sub URI.

Stephen

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