My fairly limited experience with Node and Express doesn't help, but I'm having trouble debugging the app from the terminal window. Here is the issue:
node debug app.js
< debugger listening on port 5858
break in server.js:1
1 var express = require('express');
There is a popular GUI debugger (leveraging WebKit, i.e. Chrome, Safari..).
You should give it a go https://github.com/dannycoates/node-inspector