Problem with link_to

Using Rails 1.2 here replacing your local variable as the instance
@item the follow code worked:

<% @item = 'My Title' %>

<div id="rightareah3">
    <h3>
        <%= link_to h (@item), :action => 'show', :id => 1 %>
    </h3>
</div>

Is your local variable coming from a loop for item?

Blaine