Help with observer configuration

I'm setting up acts_as_authenticated but want to use it for now in development mode.

Anyway in the configuration it says to add to environment.rb under Rails::Initializer.run do |config| config.active_record.observers = :user_observer

All I want to know is should I be putting this in environments/development.rb to make it work using localhost. Mail will be going out using remote SMTP server. Or just leave it in environment.rb ?

Stuart