Just go to the the rails directory that corresponds to this one on your computer (This is on a windows XP machine, but you should be able to figure out the right path on your machine)

C:\ruby\lib\ruby\gems\1.8\gems\rails-2.3.5\lib\commands

Open up server.rb

And edit the line that says

server = Rack::Handler::Mongrel

to say

server = Rack::Handler::Thin

enjoy