Mongrel not starting up for new apps, but is fine on old

I had to reinstall my OS and every thing else with it. So on this long
journey I final managed to get my old rails apps running right.
But now any new rails apps a create wont run on my local host threw
mongrel.

I get
C:/Ruby187/lib/ruby/gems/1.8/gems/rack-1.2.1/lib/rack/handler/mongrel.rb:1:in
`require': no such file to load -- mongrel (LoadError)

And a bunch more stuff but thats the start. As far as I can tell the new
apps are set up the same as old apps with the old apps being:

Ruby version 1.8.7 (i386-mingw32)
RubyGems version 1.3.7
Rack version 1.0
Rails version 2.3.5
Active Record version 2.3.5
Active Resource version 2.3.5
Action Mailer version 2.3.5
Active Support version 2.3.5
Application root F:/ascential_tires
Environment development
Database adapter sqlite3
Database schema version 20101023162909

When i create a new rails app it runs threw the build with no erros, but
when I go to run the server it never starts and I get an exit with the
for mentioned error.
But if I run the older app it starts up in mongrel just fine.

any clue why the new aps wouldn't see mongrel?

ok I notice that the builds are diferent

old apps dont have a Configuration/application.rb

but the new applications does

it has Bundler.require(:default, Rails.env) if defined?(Bundler)

and i do have bundler 1.0.7 installed doubt thats the problem but its
the only diference....

The old apps were built in a Netbeans 6.8 ide while these new ones are
being built in 6.9

old apps built in 1.8.6 and updated to run on 1.8.7 platform

1.8.7-p330 is the current rails...

I'm just stabbing at what the problem might be