Upgrading to Rails 3 by starting with RVM 1.8.7. OSX 10.5.8

Output:
josh-crewss-macbook:~ joshcrews$ gem install sqlite3-rubyBuilding native extensions.  This could take a while...ERROR:  Error installing sqlite3-ruby:  ERROR: Failed to build gem native extension.
/Users/joshcrews/.rvm/rubies/ruby-1.8.7-p174/bin/ruby extconf.rb
checking for sqlite3.h... yes
checking for sqlite3_libversion_number() in -lsqlite3... yes
checking for rb_proc_arity()... no
checking for sqlite3_column_database_name()... no
checking for sqlite3_enable_load_extension()... no
checking for sqlite3_load_extension()... no
creating Makefile

make
gcc -I. -I. -I/Users/joshcrews/.rvm/rubies/ruby-1.8.7-p174/lib/ruby/1.8/i686-darwin9.8.0 -I. -I/usr/local/include -I/opt/local/include -I/usr/include  -D_XOPEN_SOURCE -D_DARWIN_C_SOURCE   -fno-common -g -O2  -fno-common -pipe -fno-common  -O3 -Wall -Wcast-qual -Wwrite-strings -Wconversion -Wmissing-noreturn -Winline  -c database.c
database.c: In function ‘deallocate’:
database.c:17: warning: implicit declaration of function ‘sqlite3_next_stmt’
database.c:17: warning: assignment makes pointer from integer without a cast
database.c: In function ‘initialize’:
database.c:76: warning: implicit declaration of function ‘sqlite3_open_v2’
database.c:79: error: ‘SQLITE_OPEN_READWRITE’ undeclared (first use in this function)
database.c:79: error: (Each undeclared identifier is reported only once
database.c:79: error: for each function it appears in.)
database.c:79: error: ‘SQLITE_OPEN_CREATE’ undeclared (first use in this function)
database.c: In function ‘set_sqlite3_func_result’:
database.c:277: error: ‘sqlite3_int64’ undeclared (first use in this function)
database.c: In function ‘rb_sqlite3_func’:
database.c:311: warning: passing argument 1 of ‘ruby_xcalloc’ as signed due to prototype
database.c: In function ‘rb_sqlite3_step’:
database.c:378: warning: passing argument 1 of ‘ruby_xcalloc’ as signed due to prototype
make: *** [database.o] Error 1

Gem list (these are under RVM, under system I've got lot more gems included the sqlite3-ruby that's worked for 1.5 years)

josh-crewss-macbook:~ joshcrews$ gem list

*** LOCAL GEMS ***

abstract (1.0.0)
actionmailer (3.0.0.beta3)
actionpack (3.0.0.beta3)
activemodel (3.0.0.beta3)
activerecord (3.0.0.beta3)
activeresource (3.0.0.beta3)
activesupport (3.0.0.beta3, 2.3.8)
arel (0.3.3)
builder (2.1.2)
bundler (0.9.25)
capybara (0.3.8)
configuration (1.1.0)
cucumber (0.7.2)
cucumber-rails (0.3.1)
culerity (0.2.10)
database_cleaner (0.5.2)
diff-lcs (1.1.2)
erubis (2.6.5)
ffi (0.6.3)
gherkin (1.0.30)
i18n (0.4.0, 0.3.7)
json_pure (1.4.3)
launchy (0.3.5)
mail (2.2.1)
memcache-client (1.8.3)
mime-types (1.16)
nokogiri (1.4.2)
polyglot (0.3.1)
rack (1.1.0)
rack-mount (0.6.3)
rack-test (0.5.4)
rails (3.0.0.beta3)
railties (3.0.0.beta3)
rake (0.8.7)
rdoc (2.5.8)
rspec (2.0.0.beta.10, 2.0.0.beta.8)
rspec-core (2.0.0.beta.10, 2.0.0.beta.8)
rspec-expectations (2.0.0.beta.10, 2.0.0.beta.8)
rspec-mocks (2.0.0.beta.10, 2.0.0.beta.8)
rspec-rails (2.0.0.beta.10, 2.0.0.beta.8)
rubygems-update (1.3.7)
selenium-webdriver (0.0.20)
spork (0.8.3)
term-ansicolor (1.0.5)
text-format (1.0.0)
text-hyphen (1.0.0)
thor (0.13.6)
treetop (1.4.8)
trollop (1.16.2)
tzinfo (0.3.22)
webrat (0.7.1)

Version of XCode: 3.1.1

My suspicion is it has to do with "-I/Users/joshcrews/.rvm/rubies/ruby-1.8.7-p174/lib/ruby/1.8/i686-darwin9.8.0", because i686-darwin9.8.0 doesnt exist in that file