restful authentication help : updates never reach database

my setup:
OS X 10.6.3
rails (2.3.5)
sqlite

the problem: moving this old code to a new project (I didn't want to
hunt down yet-another-authentication module as I can't tell what is
abandoned or not, I figured copy paste would be the quickest - no such
luck), basic user authentication is broken.
I found several and fixed several pieces of broken code, but now I am
stuck at:
ActiveRecord refuses to save changes to the User model, in particular:
when the acs_as_state_machine has changed the value.

e.g. this state machine will call a Model method:
def make_activation_code
   self.activation_code= ...
end

as a result of a state change (from <non existent | passive state> ->
pending

A state change occurs on object create, but, ironically, thanks to
acts_as_state_machine's plugin setup, AFTER the object has already been
stored into the database.

The original code had a
u = User.new(...)
u.register!
...
etc.

all of which would store nothing at all the the database (this was raw
original generator code unmodified, and used to work)

I then tried:
u = User.create() (force the object creation)
...

and
u = User.new(...)
u.register!
u.save!
u.save(false)

the latter lines with printouts confirm the u finally has the right
activation code (in this case, after save!, because
acts_as_state_machine latches onto after_create, and THEN plops in the
authentication_code) ... alas, save(false, or any subsequent calls to
save, and the setting of the authentication_code inside the model fail
to update the database, and these changes to the object are lost
forever...

What am I missing?

DJ Cole wrote:

my setup:

save(false)

acts_as_state_machine latches onto after_create, and THEN plops in the
authentication_code) ... alas, save(false, or any subsequent calls to

That should read "activation_code ...."