This Rails error is a nasty bugger:
=> Booting Mongrel (use 'script/server webrick' to force WEBrick)
=> Rails application starting on http://0.0.0.0:3000
=> Call with -d to detach
=> Ctrl-C to shutdown server
** Starting Mongrel listening at 0.0.0.0:3000
** Starting Rails with development environment...
Exiting
/opt/local/lib/ruby/gems/1.8/gems/rails-2.0.2/lib/commands/servers/mongrel.rb:16: warning: already initialized constant OPTIONS
/opt/local/lib/ruby/gems/1.8/gems/rails-2.0.2/lib/commands/servers/mongrel.rb:19: undefined method `options' for []:Array (NoMethodError)
from /opt/local/lib/ruby/vendor_ruby/1.8/rubygems/custom_require.rb:32:in `gem_original_require'
from /opt/local/lib/ruby/vendor_ruby/1.8/rubygems/custom_require.rb:32:in `require'
from /opt/local/lib/ruby/gems/1.8/gems/activesupport-2.0.2/lib/active_support/dependencies.rb:496:in `require'
from /opt/local/lib/ruby/gems/1.8/gems/activesupport-2.0.2/lib/active_support/dependencies.rb:342:in `new_constants_in'
from /opt/local/lib/ruby/gems/1.8/gems/activesupport-2.0.2/lib/active_support/dependencies.rb:496:in `require'
from /opt/local/lib/ruby/gems/1.8/gems/rails-2.0.2/lib/commands/server.rb:39
from /opt/local/lib/ruby/vendor_ruby/1.8/rubygems/custom_require.rb:27:in `gem_original_require'
from /opt/local/lib/ruby/vendor_ruby/1.8/rubygems/custom_require.rb:27:in `require'
from script/server:3
As others have pointed out, it occurs when you are missing gems. Unfortunately nowhere does the error actually say that. In order to get a more helpful error message, run script/console, which will tell you exactly which gem is missing.



