So I decided to enable back POW for easy setting up rails app in my computer. POW allows you to have .dev which link back to your rails app directory. Also I’m using Powify gem by 37signals. Instead of using rbenv, I’m using RVM — don’t ask why.
My pre-rails-3 apps works ok except for latest one. Reason being, I need to add .rvmrc and .powenv in my root application directory. Once that done, my rails app works like a charm.