First install mysql from the command line
sudo apt-get install mysql-server libmysqlclient15-dev
gem install mysql
gem install mysql2
Now that mysql is installed you can create your first rails app like so
rails new blog -d mysql
After you get the app created, cd into the directory that gets generated. Next generate a simple post object with the following command
rails generate scaffold Post title:string body:text
Once this object is created you will need to create the database
The last thing to do is fire up the default web server that ships with rails and make sure everything is setup correctly.
To verify open your browser and type localhost:3000/posts and see if you can create a new object. If so you have a working rails 3 application with a mysql database!