undefined method `camelize' for "app":String

Hi, trying to use rails to create an app, and get the following error
message :-

    $ rails testapp
    undefined method `camelize' for "app":String

I have the following setup/versions :-
* Windows 7
* Cygwin - GNU bash, version 3.2.49(23)-release (i686-pc-cygwin)

Versions via Cygwin :-
* ruby 1.9.1p376 (2009-12-07 revision 26041) [i386-cygwin]
* Rails 2.3.5
* gem : 1.3.5

I successful use rails via the windows command prompt, but that sucks,
I want unix style entry! (yeah, I should use Linux then!)

Versions via Windows command prompt :-
* ruby 1.9.1p243 (2009-07-16 revision 24175) [i386-mingw32]
* Rails 2.3.5
* gem : 1.3.5

I have downloaded and build the lastest source from rubylang in the
cygwin env, so it must be something to do with that?

Same problem for me running FreeBSD 8, Ruby 1.9.1 and Rails 2.3.8. Any