I had problem installing Rails 3 beta. gem install rails --pre asked for rack >= 1.0.0 though I had rack 1.1.0 installed. After manual installation of rack 1.0.1 previous install instruction installed rails 2.3.3. Problem was in gem sources ( check yours with gem sources). I had http://gems.rubyonrails.com there. Just remove it ((sudo) gem sources -r http://gems.rubyonrails.com) and rails 3.beta will be installed.
Just my 2 cents.