Whetting your Appetite App Error
Hopefully by now a solution has presented itself. I had the same results yesterday, but installing InstantRails works fine. That is, I installed InstantRails per the instructions starting on page 17, right on top of my previously somehow-corrupt manual installation, and with Apache disabled (per the instructions), the addressbook app worked fine. As mentioned in the text, InstantRails does not modify your Windows environment. That means if you ever want to remove it, just delete the contents of that folder and you're done. Nice.
However, also as mentioned in the text, that means InstantRails will need to manage the paths for all your resources, so you need to open the Windows command line console from within the InstantRails client (using their "Ruby Console Window".) As long as you do that, everything seems to work like in the text. So far.