Although from your rails app you can read/right anything on your
system, your web server has limited access to you system (for good
security reasons). I am running on a windows sytem with InstantRails,
but the principles are the same.
You need to know what the "public" directory is for your web server.
For my InstantRails setup thats c:\InstantRails\rails_apps\app_name
\public. That means all the assets/content/images I want my web
server to serve need to be under that directory. It looks like this
is not the case for you.
Then my image tags are referenced with the idea the "/" is actually "c:
\InstantRails\rails_apps\app_name\public". For example, I store my
images in c:\InstantRails\rails_apps\app_name\public\catalog\images.
My image_tags are all <%= image_tag /catalog/images/.... %>
So I think your problems may be solved be (a) knowing what your public
directory is for your web server configuration, (b) putting your
content under that directory and (c) image_tag'ing based on that
public directory being the root directory.