Requiring sinatra (which pulls rack) results in the following on Windows XP

C:\temp>ruby test.rb
C:/dev/ruby/lib/ruby/gems/1.8/gems/rack-1.2.1/lib/rack/utils.rb:138:in union': can't convert Array into String (TypeError) from C:/dev/ruby/lib/ruby/gems/1.8/gems/rack-1.2.1/lib/rack/utils.rb:138 from C:/dev/ruby/lib/ruby/site_ruby/1.8/rubygems/custom_require.rb:31:ingem_original_require'
from C:/dev/ruby/lib/ruby/site_ruby/1.8/rubygems/custom_require.rb:31:in require' from C:/dev/ruby/lib/ruby/gems/1.8/gems/rack-1.2.1/lib/rack/request.rb:1 from C:/dev/ruby/lib/ruby/site_ruby/1.8/rubygems/custom_require.rb:31:ingem_original_require'
from C:/dev/ruby/lib/ruby/site_ruby/1.8/rubygems/custom_require.rb:31:in require' from C:/dev/ruby/lib/ruby/gems/1.8/gems/rack-1.2.1/lib/rack/showexceptions.rb:3 from C:/dev/ruby/lib/ruby/site_ruby/1.8/rubygems/custom_require.rb:31:ingem_original_require'
... 7 levels...
from C:/dev/ruby/lib/ruby/gems/1.8/gems/sinatra-1.0/lib/sinatra.rb:4
from C:/dev/ruby/lib/ruby/site_ruby/1.8/rubygems/custom_require.rb:36:in gem_original_require' from C:/dev/ruby/lib/ruby/site_ruby/1.8/rubygems/custom_require.rb:36:inrequire'
from test.rb:1

Tested with the newest RubyInstaller and the last OneClickInstaller with all gems updated to 23.06.2010.
test.rb is just one line: require 'sinatra'

Problem does not exist on Mac OS X with the standard Apple Ruby.
Reverting to rack 1.0.1 solves the problem.