* Install mysql’s x86_64 version from the .dmg file (I had a problem doing this when booted into the 64bit kernel, a 32bit kernel macbook had no problem) With the 64bit kernel, the system reported ‘no mountable file systems’ when trying to mount the .dmg file. A reboot into 32bit mode allowed the .dmg to be mounted and installed.
* Change into your virtual environment if desired, source bin/activate
* fetch MySQL-python-1.2.3c1

tar xzf MySQL-python-1.2.3c1.tar.gz
cd MySQL-python-1.2.3c1
ARCHFLAGS='-arch x86_64' python setup.py build
ARCHFLAGS='-arch x86_64' python setup.py install

If everything works, you should see:

$ python
Python 2.6.1 (r261:67515, Jul  7 2009, 23:51:51)
[GCC 4.2.1 (Apple Inc. build 5646)] on darwin
Type "help", "copyright", "credits" or "license" for more information.
>>> import MySQLdb
>>>

Some of the possible things you’ll encounter:

After python setup.py build:

ld: warning: in build/temp.macosx-10.6-universal-2.6/_mysql.o, file is not of required architecture
ld: warning: in /usr/local/mysql/lib/libmysqlclient.dylib, file is not of required architecture
ld: warning: in /usr/local/mysql/lib/libmygcc.a, file is not of required architecture
ld: warning: in build/temp.macosx-10.6-universal-2.6/_mysql.o, file is not of required architecture
ld: warning: in /usr/local/mysql/lib/libmysqlclient.dylib, file is not of required architecture
ld: warning: in /usr/local/mysql/lib/libmygcc.a, file is not of required architecture

This means that you have the i386 version of mysql installed. Or, if you have the x86_64 version, you have didn’t include the proper ARCHFLAGS command.

ImportError: dynamic module does not define init function (init_mysql)

this means that the easy_install or the build/install process was run which tried to build a ppc/i386/x86_64 combined build.

If you see messages like:

$ python
Python 2.6.1 (r261:67515, Jul  7 2009, 23:51:51)
[GCC 4.2.1 (Apple Inc. build 5646)] on darwin
Type "help", "copyright", "credits" or "license" for more information.
>>> import MySQLdb
/Users/xxxxx/Python/django/lib/python2.6/site-packages/MySQL_python-1.2.3c1-py2.6-macosx-10.6-universal.egg/_mysql.py:3: UserWarning: Module _mysql was already imported from /Users/xxxxx/Python/django/lib/python2.6/site-packages/MySQL_python-1.2.3c1-py2.6-macosx-10.6-universal.egg/_mysql.pyc, but /Users/xxxxx/Python/django/MySQL-python-1.2.3c1 is being added to sys.path
>>>

Then you are still in the build directory. cd .. and try again.