I have standard ruby-head and Rails 3.1rc4.
I installed ruby-debug with following instructions from http://dirk.net/2010/04/17/ruby-debug-with-ruby-19x-and-rails-3-on-rvm/<
I used the gem 'debugger' which is a fork of ruby-debug(19) that works on 1.9.2 and 1.9.3 and installs easily for rvm/rbenv rubies.
It makes the error disappear !