OS: Ubuntu 9.10

$rails --version
  Rails 2.3.5
$vi /home/ubuntu/deltacloud/portal/src/config/environment.rb
   #RAILS_GEM_VERSION  ( I have commented )
$rake db:create:all
  Couldn't create database for {"username"=>"postgres", "adapter"=>"postgresql", "database"=>"dcloud_test", "host"=>"localhost"}

What mistake i did ?