Mysql::Error #28000Access denied

Get Riot.

I think the mysql error is a red herring - as you said the migration worked ok.

Do you have a model for Classified?

class Classified < ActiveRecord::Base
end

as well the controller is generally pluralized (classifieds_controller.rb), although this isn't likely causing this problem.

If the above don't help, check log/development.log - it will likely have more symptoms.

cheers,
Jodi