All these went fine, and the last step was to install the libs and header files:
=== (output from the build) ===
/usr/bin/install -c -d /usr/local/bin
./libtool --mode=install /usr/bin/install -c sqlite3 /usr/local/bin
/usr/bin/install -c .libs/sqlite3 /usr/local/bin/sqlite3
/usr/bin/install -c -d /usr/local/include
/usr/bin/install -c -m 0644 sqlite3.h /usr/local/include
/usr/bin/install -c -m 0644 ./src/sqlite3ext.h /usr/local/include
/usr/bin/install -c -d /usr/local/lib/pkgconfig;
/usr/bin/install -c -m 0644 sqlite3.pc /usr/local/lib/pkgconfig;
===

I added this to my ~/.bash_profile:
===
export DYLD_LIBRARY_PATH=/usr/local/lib
===

I then quit iTerm and restarted it. Running 'set | grep DY' tells me this:

===
DYLD_LIBRARY_PATH=/usr/local/lib
===

Nifty, running 'ls $DYLD_LIBRARY_PATH/libsql*' tells me this:
===
-rwxr-xr-x 1 wheel 437112 Apr 10 12:37 /usr/local/lib/libsqlite3.0.8.6.dylib
lrwxr-xr-x 1 wheel 22 Apr 10 12:37
/usr/local/lib/libsqlite3.0.dylib -> libsqlite3.0.8.6.dylib
-rw-r--r-- 1 wheel 585868 Apr 10 12:37 /usr/local/lib/libsqlite3.a
lrwxr-xr-x 1 wheel 22 Apr 10 12:37
/usr/local/lib/libsqlite3.dylib -> libsqlite3.0.8.6.dylib
-rwxr-xr-x 1 wheel 847 Apr 10 12:37 /usr/local/lib/libsqlite3.la
===

This is where I think it fell apart: When I run 'python setup.py
install', this message rolls by early on:

===
gcc -arch ppc -arch i386 -isysroot /Developer/SDKs/MacOSX10.4u.sdk
-fno-strict-aliasing -Wno-long-double -no-cpp-precomp -mno-fused-madd
-fno-common -dynamic -DNDEBUG -g -O3 -DNDEBUG=1 -DEXPERIMENTAL=1
-DSQLITE_OMIT_LOAD_EXTENSION=1
-I/Library/Frameworks/Python.framework/Versions/2.4/include/python2.4
-c apsw.c -o build/temp.macosx-10.3-fat-2.4/apsw.o
===

In the /Developer/SDKs/MacOSX10.4u.sdk/ directory, I have this:
===
-rw-r--r-- 1 wheel 31298 Sep 12 2006
/Developer/SDKs/MacOSX10.4u.sdk/usr/include/sql.h
-rw-r--r-- 1 wheel 70568 Sep 12 2006
/Developer/SDKs/MacOSX10.4u.sdk/usr/include/sqlext.h
-rw-r--r-- 1 wheel 54690 Sep 11 2006
/Developer/SDKs/MacOSX10.4u.sdk/usr/include/sqlite3.h
-rw-r--r-- 1 wheel 9866 Sep 12 2006
/Developer/SDKs/MacOSX10.4u.sdk/usr/include/sqltypes.h
-rw-r--r-- 1 wheel 22612 Sep 12 2006
/Developer/SDKs/MacOSX10.4u.sdk/usr/include/sqlucode.h
===

Crap, those are waayy old. :-/

In /usr/local/include/ I see these shiny new files:
===
-rw-r--r-- 1 wheel 81369 Apr 10 12:37 sqlite3.h
-rw-r--r-- 1 wheel 15689 Apr 10 12:37 sqlite3ext.h
===

So, I copied the new ones (from /usr/local/include/) over the old ones
(in /Developer/SDKs/MacOSX10.4u.sdk/).

Now, running 'python setup.py install' builds apsw. Yay.

I skipped the steps re: paramiko and pycrypto, because I didn't want
to burn any more time on this - it isn't billable. ;-)

I wasn't sure what to do next, because of this comment: "On Linux and
Mac you should build the USB module if you use an LG phone with a
straight USB cable (ie not USB to serial)." I have an LG phone, but am
using bluetooth, not usb. Hmm. I'll just run it and see what happens:

===
python bp.py
Using (slow) Python version of Jaro/Winkler. Build C module in native/strings.
===

Joy, it works! I'll maybe go back and build those later, but it works at least.

OK, so now who can help me build support for my LG-AX245? :-)

Larry