Lighttpd after version 1.4.9 requires the full path in the “bin-path” part of the lighttpd.conf file. Also from version 1.4.10 you will have CWD in your config files:

"bin-path" => CWD + "/public/dispatch.fcgi" 

So if you have old lighttpd (<=1.4.8) and old rails applications (<=1.1.0) you can have a problems (with existing or just created applications):

• upgrading only the lighttpd, but not the rails (solution: convert relative paths to the absolute ones)
• upgrading only the rails, but not the lighttpd (CWD keyword support is missing in the old lighty versions, solution: remove CMD+ part from the path).

The best solution is maybe:

• convert all paths to absolute ones for the existing applications
• upgrade lighttpd to the latest version (1.4.11 in the moment)
• “freeze” the existing applications (put in /vendor/rails/ the correct rails version files)
• upgrade the rails (no need to do anything when generate new projects)