What is the best way to move rails application

It all depends on your current setup.

Do you use Mongrel+Apache, LiteHTTPD or Webrick? If you use Apache as
a proxy to your application server then you will need to copy any
Apache virtual domain configuration files (or mongrel cluster files)
and tinker with them to work on your new host.

Are you using SQLite or a database server like MySQL/postgres? If you
don't use SQLite you will need to dump the database to a file an load
it into the new database on the new host.

Clear anything in the rails_app/tmp directory.

-christos

i usually work on Mongrel+Apache (Windows XP).

I've never used Apache on XP but it should be a simple case of copying configuration files for apache over to the new host, and restarting the server.

My database is always MYSQL.

Create a db with the same name then on the new host and then use 'mysqldump' to dump from the old host and load it into the new one.

Where does your app fail on the new host exactly? Do you have any errors in the logs?

-christos