rails 3 script/server problem

I installed Rails 3 beta, created a new rails 3 app, and tried to run it but am getting this error when running script/server: Cannot find gem for Rails =1.2.6.0

Do I need to install an earlier version of rails to have a running rails 3 app?

Thanks

In Rails 3 you don't start the server by "script/server" anymore. You use "rail server" instead. Check out rails.info

I created a rails 3 app called "app1". Changed directory to app1/ Executed the command "rail server", but it is failing: "-bash: rail: command not found" Tried "rails server" instead, but this is creating a new app called "server"

Tried "rails server" instead, but this is creating a new app called "server"

Are you sure you tried "rails server" in the your app dir?

Regards, Rimantas

Sorry it was a typo. I actually meant "rails server"