After upgrading to Snow Leopard, I had to rebuild/reinstall MacPorts and RubyGems as recommended. While doing this, I found that sqlite3-ruby gem install failed with errors related to extconf.rb file.
Not sure why this works but I found a working solution at StackOverflow which replaces:
with a symbolic link to one that came with XCode for Snow Leopard:
You can find the full ‘ln’ command at StackOverlow page above but be sure to rename the original in case you need to restore it.