Simple: Tell the application controller how to handle exceptions, here a RecordNotFound error.
Do this with the following line:

# application_controller.rb

  rescue_from ActiveRecord::RecordNotFound, :with => :render_404

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This will call the method render_404 whenever a RecordNotFound error occurs (you could pass a lambda instead of a symbol, too).
Now write this method:

def render_404
  render 'errors/404', :status => '404'
end

Finally create a 404 document views/errors/errors.html.haml.

%h1 Record Not Found

.error The record you requested could not be retrieved in my database.

Any 404 error that is caused by something not found in your Rails app will render a nice message using your default layout. Similarly, you may catch and handle any other error.