Having Trouble with installation of Rails

Hi I am a newbie … I am having trouble with this part of Rails
installation :

Make your application.Create your application skeleton and start the

rails path/to/your/new/application
cd path/to/your/new/application
ruby script/server

You’re running Ruby on Rails! Follow the instructions on http://

What exactly is application skeleton and how do I make my application.
Sorry for the ultra newbie question. Please answer…

Here you can read a very nice tutorial for writing your first rails