Do you have the mysql-ruby bindings installed? I don’t know how you installed Rails and / or Ruby on your system. Some distros have this as a package.
You could also install it with gems
sudo gem install mysql
provided that you have everything set up right on your box (paths, compilers, etc),
I don’t know Centos at all, so I won’t be much more help than that. However, I’ve seen that error before whenever I had heavy dtabase access in my Rails apps and they were using the Mysql libraries that comes with Rails rather than the much faster C bindings I talked about here.
Hope that helps you some.