First problem: Need to install make and gcc. 'sudo aptitude install make gcc' is necessary for a gem install of mongrel. It looks like mongrel is compiled from C to assist with speed.
If you don't have make installed, you won't see any errors during the mongrel install until you try running it within a rails project.
/usr/lib/ruby/gems/1.8/gems/mongrel-0.3.13.3/lib/mongrel.rb:666:in `register': undefined method `resolve' for nil:Mongrel::URIClassifier (NoMethodError)
So I installed make and gcc and reinstalled mongrel through 'sudo gem install mongrel'.