I posted a (probably way too long) answer in a similar question: rails - NoMethodError: undefined method `configure' for FirstApp. This thread actually started me on the way to my eventual solution, so I thought I'd post here as well just in case it's helpful to anyone else.
From what I can tell, the problem occurs when the app/config/initializers/development.rb (and production.rb) files are generated for a new project using some newer versions of Rails (I'm not sure in which version it started, I only tested Rails 4.1.4). Mr. Hartl uses Rails 4.0.8 for his tutorial, and that's the highest version I tested in which the new syntax doesn't occur.
In Rails 4.1.4, and maybe some other versions after 4.0.8, the first line in those files is generated as Rails.application.configure.do
rather than, using a project called sample_app
as an example, SampleApp::Application.configure.do
as in 4.0.8.
I'm new to Rails so I don't know why this syntax changed in newer versions. I'm assuming it's intentional and somehow better than the old way. Most likely, Mr. Hartl will take it in to account in future editions of his tutorial that are updated for versions of Rails which include this change.
Until then, see my other answer in the question I mentioned above for a more thorough explanation of how I got around it on Windows 7, but the tl;dr of it is:
Make sure you're using the version of Rails specified for the tutorial (4.0.8) in your local repository/root development directory before you create your new project. Updating your Gemfile after creating the project is still important, but it won't solve this problem if the files themselves were generated with a newer version of Rails. You'll have to go in and edit that line manually in that case, as other users have suggested.