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