I'm using Postgresql for my primary database under OSX and I (of course) use Python for all my dev work.
Unfortunately, MacPython2.3 and psycopg 1.1.8 don't seem to play nice. There's a little bug in the configure scripts that causes a compile failure.
Fixes have been posted to the psycopg mailing list you can read all about it here.
On a side note, I've been giving PyPgSQL a try and it's a LOT slower than psycopg.
Happy hacking,
vic
Clearly I haven't been playing with autoconf enough lately. The best way to fix the bug is to just edit the Makefile.pre.in and add a constant for PYTHONFRAMEWORK=Python