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Install nginx server using following command

apt-get install nginx Edit nginx configuration and add server block inside html block. 
server {
    listen       80;
    server_name  boost;

    root /home/sandip/rails_app/public;

    location / {
        proxy_set_header  X-Real-IP  $remote_addr;
        proxy_set_header  X-Forwarded-For $proxy_add_x_forwarded_for;
        proxy_set_header Host $http_host;
        proxy_redirect off;

        if (-f $request_filename/index.html) {
            rewrite (.*) $1/index.html break;
        }
        if (-f $request_filename.html) {
            rewrite (.*) $1.html break;
        }
        if (!-f $request_filename) {
            proxy_pass http://thin;
            break;
        }
    }

    error_page   500 502 503 504  /50x.html;
    location = /50x.html {
        root   html;
    }
}

Install thin server as gem
sudo gem install thin

Building native extensions.  This could take a while...
Building native extensions.  This could take a while...
Successfully installed eventmachine-0.12.10
Successfully installed thin-1.2.7
2 gems installed

Install thin service
sudo thin install
Installing thin service at /etc/init.d/thin ...
mkdir -p /etc/init.d
writing /etc/init.d/thin
chmod +x /etc/init.d/thin
mkdir -p /etc/thin

Configure thin to start at system boot
sudo /usr/sbin/update-rc.d -f thin defaults

Then put your config files in /etc/thin
sudo /usr/sbin/update-rc.d -f thin defaults
update-rc.d: warning: thin stop runlevel arguments (0 1 6) do not match LSB Default-Stop values (S 0 1 6)
 Adding system startup for /etc/init.d/thin ...
   /etc/rc0.d/K20thin -> ../init.d/thin
   /etc/rc1.d/K20thin -> ../init.d/thin
   /etc/rc6.d/K20thin -> ../init.d/thin
   /etc/rc2.d/S20thin -> ../init.d/thin
   /etc/rc3.d/S20thin -> ../init.d/thin
   /etc/rc4.d/S20thin -> ../init.d/thin
   /etc/rc5.d/S20thin -> ../init.d/thin

Create thin configuration
sudo thin config -C /etc/thin/<config-name>.yml -c <rails-app-root-path> --servers <number-of-threads> -e <environment>
</environment></number-of-threads></rails-app-root-path></config-name>
In my case,
sudo thin config -C /etc/thin/rails_app.yml -c /home/sandip/rails_app --servers 3 -e production
>> Wrote configuration to /etc/thin/rails_app.yml

thin configuration file will look like

Start/stop/restart Nginx & thin server using command

sudo service nginx start|stop|restart
sudo service thin start|stop|restart


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#user  nobody;
user www-data;
worker_processes  2;

#error_log  logs/error.log;
#error_log  logs/error.log  notice;
#error_log  logs/error.log  info;

#pid        logs/nginx.pid;

events {
    worker_connections  1024;
}

http {
    passenger_root /var/lib/gems/1.8/gems/passenger-2.2.8;
    passenger_ruby /usr/bin/ruby1.8;
    passenger_max_pool_size 3;

    include       mime.types;

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Install passenger program that will run your rails application
1. sudo gem install passenger
Install nginx server with passenger enabled
2. passenger-install-nginx-module

it will open apt, click "Enter" to contine
then select option 1 for default install
then it will ask
Where do you want to install Nginx to?

Please specify a prefix directory [/opt/nginx]:
press enter

then copy following block

server {
listen 80;
server_name www.yourhost.com;
root /somewhere/public;   # <--- be sure to point to 'public'!
passenger_enabled on;
}

Make nginx Configuration
3. vi /opt/nginx/conf/nginx.conf
Make passenger_root and passenger_ruby path to configuration


http {
passenger_root /usr/local/lib/ruby/gems/1.8/gems/passenger-2.2.4;
passenger_ruby /usr/local/bin/ruby;


then add server configuration block inside http block
http{
...
server {
listen 80;
server_name www.yourhost.com; //Make sure this dns entry inside /etc/hosts
root /carsonline/public;   # <--- be sure to point to 'public'! //here carsonline is RAILS_ROOT
passenger_enabled on;
}

Thats, all

4. Launch Server

/opt/nginx/sbin/nginx