Unless you are using a non-standard library package, you should have no need to set LD_LIBRARY_PATH. If you want to check whether you just have a bad library installation, then export LD_LIBRARY_PATH in the shell instance in which that you are about to run gcc and see whether gcc can link the binary. For libraries installed in /usr/lib, it should not be the case that this helps, since that path should already be part of the standard gcc library search path.
Which versions of libsqlite3* do you have installed? Run 'dpkg -l libsqlite3*' and post the output. On my 10.04 system, I have:
Both of these have to be installed to build (the -dev package) and run (the -0 package) applications that link against libsqlite3.
|/ Err?=(none)/Reinst-required (Status,Err: uppercase=bad)
||/ Name Version Description
ii libsqlite3-0 3.6.22-1 SQLite 3 shared library
ii libsqlite3-dev 3.6.22-1 SQLite 3 development files