newbie question

Assuming...
- by list.rhml, you mean list.rhtml
- there are a couple more lines in the view to close the </ul> and end
the else block
- you've verified that the books are in the development database
... something doesn't add up.

To find the bug, the first thing I'd do would be to put a raise or a
breakpoint in the controller action to make sure it's being called.
Like...

def list
  raise "yes, 'list' is being called."
  @books = Book.find(:all)
end