Dear,

The following steps are just what I have done with nginx on Ubuntu 10.10 server.

1. download nginx-1.0.11.
2. untar nginx-1.0.11
3. configure
4. make
5. make install
6. run nginx

And then I got the following error.

nginx: [emerg] unknown "app_dir" variable

I performed exactly same steps on Redhat 6 enterprise and I had no issue at all.
Please let me know what this error means and how to fix it.
I am looking forward to hearing from you.
Thank you.