UPDATE: After updating all my software, the error message has changed.

Now, when I run "python setup.py install" I get the following:

Warning: Unable to find 'pg_config' filebuilding 'psycopg2._psycopg' extension
gcc-4.0 -arch ppc -arch i386 -isysroot /Developer/SDKs/MacOSX10.4u.sdk -fno-strict-aliasing -fno-common -dynamic -DNDEBUG -g -O3 -DPSYCOPG_DEFAULT_PYDATETIME=1 -DPSYCOPG_VERSION="2.2.1 (dt dec ext pq3)" -DPSYCOPG_EXTENSIONS=1 -DPSYCOPG_NEW_BOOLEAN=1 -DHAVE_PQFREEMEM=1 -DHAVE_PQPROTOCOL3=1 -I/Library/Frameworks/Python.framework/Versions/2.6/include/python2.6 -I. -c psycopg/psycopgmodule.c -o build/temp.macosx-10.3-fat-2.6/psycopg/psycopgmodule.o

followed by a very long list of other error messages.

After running python setup.py install I get the following:

Warning: Unable to find 'pg_config' filebuilding 'psycopg2._psycopg' extension
gcc-4.0 -arch ppc -arch i386 -fno-strict-aliasing -fno-common -dynamic -DNDEBUG -g -O3 -   DPSYCOPG_DEFAULT_PYDATETIME=1 -DPSYCOPG_VERSION="2.2.1 (dt dec ext pq3)" -DPSYCOPG_EXTENSIONS=1 -DPSYCOPG_NEW_BOOLEAN=1 -DHAVE_PQFREEMEM=1 -DHAVE_PQPROTOCOL3=1 -I/Library/Frameworks/Python.framework/Versions/2.6/include/python2.6 -I. -c psycopg/psycopgmodule.c -o build/temp.macosx-10.3-fat-2.6/psycopg/psycopgmodule.o
unable to execute gcc-4.0: No such file or directory
error: command 'gcc-4.0' failed with exit status 1

There's probably something screamingly obvious there to anyone who knows the first thing about back-end web programming, but unfortunately it's all gobbledegook to me. The psycopg2 documentation was not helpful.