What do you have in your routes file?
Try putting
map.log_out 'logout', :controller => 'sessions', :action => 'destroy'
in your routes.
Then just have
<%= link_to "Sign out", log_out_url %>
for the sign out link.
EDIT
Its all down to how you specify the routing.
Because you had the map.log_out in the routing, then the url http://localhost:3000/logout url is picked up by this and routed to the correct action.
If you have :
<%= link_to "logout", :controller=> "sessions", :action=> "destroy" %>
This will just generate a link for you of http://localhost:3000/session. But, it does nothing to the routing. You still need to specify the correct routes.
Note that Rails does not append the destroy action to the url. (It will not create http://localhost:3000/session/destroy.) It assumes that if you have an action of destroy that you will be sending it with a DELETE http verb. For some reason, its not quite perfect and it doesnt actually also default to sending the DELETE verb.
You can force it to do this :
<%= link_to "logout", {:controller=> "user_sessions", :action=> "destroy"}, :method => :delete%>
This will still not work unless you also route it correctly. If you put the following into the routes :
map.resource :session
Then rails will generate the routing for all the verbs and specify the default actions for them, including DELETE. More information can be found here : Rails Routing from the Outside In.
That whole page is worth reading over and over until you really understand it. Routing is key to understanding Rails!
For a simple controller like Sessions, it is easier just to specify the log_out route and then link to log_out_url..
(Hope that makes sense, sleep deprivation is creeping in!)