Rails server comand won't start server: creates new directories

When I try to start the rails server in my project root directory, rails
executes the create script.

Was working yesterday and now doing this.

Any help?

My out put is below.

VACSAL50841-2:sample_app ccherlet$ rails server
      create
      create app/controllers
      create app/helpers
      create app/models
      create app/views/layouts
      create config/environments
      create config/initializers
      create config/locales
      create db
      create doc
      create lib
      create lib/tasks
      create log
      create public/images
      create public/javascripts
      create public/stylesheets
      create script/performance
      create test/fixtures
      create test/functional
      create test/integration
      create test/performance

Try 'ruby script/server'

Was working yesterday and now doing this.

Probably yesterday you installed rvm and switched to rvm 1.9.2 with new
rails 3. When you logged in today your rvm, it used as default system's
ruby which contains rails 2.x.
Use this command to make your ruby 1.9.2 + rails3 environment default
one for rvm

  rvm --default use 1.9.2