when using rvm, the best practice is to create a gemset
rvm gemset create mygemset
and then create the .rvmrc file
rvm --create --rvmrc ruby-1.8.7-p352@mygemset
Run the command above from the rails directory with the obviously correct ruby version (install if it is not already installed ... rvm install ruby-1.8.7) and gemset. This way rvm will automatically install the correct ruby version for your project.
Hope this helps
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