diff --git a/railties/CHANGELOG b/railties/CHANGELOG
index 14ce0f1c58..abfb16cf03 100644
--- a/railties/CHANGELOG
+++ b/railties/CHANGELOG
@@ -1,5 +1,7 @@
 *SVN*
 
+* Fix rake dev and related commands [Nicholas Seckar]
+
 * The rails command tries to deduce your MySQL socket by running `mysql_config
 --socket`.  If it fails, default to /path/to/your/mysql.sock
 
diff --git a/railties/Rakefile b/railties/Rakefile
index 021190d472..07672415a2 100644
--- a/railties/Rakefile
+++ b/railties/Rakefile
@@ -156,7 +156,11 @@ task :copy_application do
 end
 
 task :copy_configs do
-  cp "configs/database.yml", "#{PKG_DESTINATION}/config/database.yml"
+  app_name = "rails"
+  socket = nil
+  require 'erb'
+  File.open("#{PKG_DESTINATION}/config/database.yml", 'w') {|f| f.write ERB.new(IO.read("configs/database.yml")).result(binding)}
+  
   cp "configs/routes.rb", "#{PKG_DESTINATION}/config/routes.rb"
 
   cp "configs/apache.conf", "#{PKG_DESTINATION}/public/.htaccess"
diff --git a/railties/configs/database.yml b/railties/configs/database.yml
index ffa8d11b4b..9e4a08ddf7 100644
--- a/railties/configs/database.yml
+++ b/railties/configs/database.yml
@@ -1,7 +1,7 @@
 development:
   adapter: mysql
   database: <%= app_name %>_development
-  socket: <%= socket %>
+  <%= "socket: #{socket}" if socket %>
   username: root
   password:
   # With the MySQL adapter on localhost, it defaults to /tmp/mysql.sock
@@ -13,13 +13,13 @@ development:
 test:
   adapter: mysql
   database: <%= app_name %>_test
-  socket: <%= socket %>
+  <%= "socket: #{socket}" if socket %>
   username: root
   password:
 
 production:
   adapter: mysql
   database: <%= app_name %>_production
-  socket: <%= socket %>
+  <%= "socket: #{socket}" if socket %>
   username: root
   password: