User.authenticate method returning nil in Rails 3?
class SessionsController < ApplicationController

    def new
    end

    def create
      user = User.authenticate(params[:session][:email],
                                   params[:session][:password])
      if user.nil?
        flash.now[:error] = "Invalid email/password combination"
        render 'new'
      else
        sign_in user
        redirect_to user
      end
    end

    def destroy
      sign_out
      render 'pages/options'
    end

end

class User < ActiveRecord::Base

  attr_accessor :password
  attr_accessible :first_name, :last_name, :email, :password, :password_confirmation,
                  :account_type, :email_confirmed, :weight

  validates :password,  :presence => true,
                    :confirmation => true,
                    :length => { :within => 6..40 }

  before_save :encrypt_password

  def has_password?(submitted_password)
    encrypted_password == encrypt(submitted_password)
  end

  def self.authenticate(email, submitted_password)
    user = find_by_email(email)
    return nil if user.nil?
    return user if user.has_password?(submitted_password)
  end

  def self.authenticate_with_salt(id, cookie_salt)
    user = find_by_id(id)
    (user && user.salt == cookie_salt) ? user : nil
  end

  private #################################################

  def encrypt_password
    self.salt = make_salt if new_record?
    self.encrypted_password = encrypt(password)
  end

  def encrypt(string)
    secure_hash("#{salt}--#{string}")
  end

  def make_salt
    secure_hash("#{Time.now.utc}--#{password}")
  end

  def secure_hash(string)
    Digest::SHA2.hexdigest(string)
  end

  def generate_email_conf_code
    email_conf_code = secure_hash("#{Time.now.utc}")
    self.email_conf_code = email_conf_code
  end

end

Parameters: {"session"=>{"email"=>"xxx@yyy.com", "password"=>"[FILTERED]"}}