I am trying to set up redmine on 12.04.

I did run :
apt-get install redmine redmine-mysql
It installed a whole bunch of deps. I can't get passenger to work. When I try to access redmine, I get:
The directory "/var/www" does not appear to be a valid Ruby on Rails application root.
I have:
HTML Code:
<IfModule mod_passenger.c>
  PassengerDefaultUser www-data
  PassengerRoot /usr/lib/phusion_passenger
  PassengerRuby /usr/bin/ruby
And in my virtual domain apache config I have:
HTML Code:
       <Directory /var/www/paulomatos.com/subdomains/projects/>
              RailsBaseURI /
              PassengerResolveSymlinksInDocumentRoot on
I can't understand where passenger grabs that /var/www from. How shall I proceed?