I got ruby 1.8.7 (native compiled), rails 2.3.4, OSX 10.6.2 and also sqlite3-ruby.
The error I\'m getting when accessing the rails app is
Name
If the gem isn't building it's not because you need necessarily to rebuild sqlite3 from source, but to build the gem you will require the sqlite3 developer libraries.
On most Linux/Unix systems you can install them by doing 'sudo apt-get install sqlite3-dev', however I'm not sure how it works with Macports - but make sure you have that package. You have to make sure they're in your path or pass the dir they're in when you install the gem (see the gem's output for hints as to the options for doing that).
I have sqlite3 running on my Mac just fine, both with 1.8.7 and now my updated 1.9.1 Ruby. You might want to make sure you have the XCode Developer Tools installed as well.