It seems that most of Rails 3, Ruby 1.9.2 can be used, but when it is `sqlite3-ruby`, or `mysql2` gems, then it can't compile, (missing `mkmf`?) and the latest Xcode is needed. But the latest Xcode is for Snow Leopard only. So looks like the Macbook needs to be upgraded to Snow Leopard before Rails 3 can be used?