Understanding Rails 3's respond_with

Utilizing ActionController's new respond_with method...how does it determine what to render when action (save) is successful and when it's not?

I ask because I'm trying to get a scaffold generated spec (included below) to pass, if only so that I can understand it. The app is working fine but, oddly, it appears to be rendering /carriers (at least that's what the browser's URL says) when a validation fails. Yet, the spec is expecting "new" (and so am I, for that matter) but instead is receiving <"">. If I change the spec to expect "" it still fails.

When it renders /carriers that page shows the error_messages next to the fields that failed validation as one would expect.

Can anyone familiar with respond_with see what's happening here?

#carrier.rb
  validates :name, :presence => true 

#carriers_controller.rb
class CarriersController < ApplicationController
  respond_to :html, :json

...

  def new
    respond_with(@carrier = Carrier.new)
  end

  def create
     @carrier = Carrier.new(params[:carrier])
     flash[:success] = 'Carrier was successfully created.' if @carrier.save
     respond_with(@carrier) 
  end

Spec that's failing:

#carriers_controller_spec.rb
require 'spec_helper'

describe CarriersController do

  def mock_carrier(stubs={})
    (@mock_carrier ||= mock_model(Carrier).as_null_object).tap do |carrier|
      carrier.stub(stubs) unless stubs.empty?
    end
  end


  describe "POST create" do
    describe "with invalid params" do
      it "re-renders the 'new' template" do
        Carrier.stub(:new) { mock_carrier(:save => false) }
        post :create, :carrier => {}
        response.should render_template("new")
      end
    end
  end
end

with this error:

  1) CarriersController POST create with invalid params re-renders the 'new' t