If I put model in app/models/subfo and add 
config.load_paths += ["#{RAILS_ROOT}/app/models/subfo"]
to environment.rb, glassfish gives error:
NameError (uninitialized constant PostsController::Post):
    /Library/Ruby/Gems/1.8/gems/activesupport-2.2.2/lib/active_support/dependenc
ies.rb:102:in `const_missing'...

It works with MRI mongrel, jruby webrick and tomcat.
Tested gem versions 0.9.3, 0.9.2, 0.9.1 with jruby 1.1.6 and 0.9.3 with jruby 1.2.0

Date: 2009-04-08 05:03
Sender: Vivek Pandey

Just applied the fix. It is duplicate of
http://rubyforge.org/tracker/?func=detail&atid=21080&aid=
25253&group_id=5450.

The fix will be available in next gem release.

-vivek.

Date: 2009-03-24 23:09
Sender: Jacob Kessler

Confirmed on gem, started trying to trace it.

Date: 2009-03-24 20:39
Sender: Vivek Pandey

Assigning to Jacob.