What does your database.yml look like? If you have "socket: /tmp/mysql.sock" then you problem is that file (socket) does not exist.... Find out where your socket is created (look in my.cnf), or just search for mysql.sock and put the correct value into your database.yml.
mysql.sock is a special type of file (a socket) that ruby is trying to use to communicate with mysql. There are also other alternate ways of connecting to mysql, i.e. via tcp/ip.