Much thanks to AnatomicWax!

Just reposting here:

  • Mount the Xcode 3.2.6 DMG
  • Open Terminal
  • Enter the command: export COMMAND\_LINE\_INSTALL=1
  • Enter the command: open “/Volumes/Xcode and iOS SDK/Xcode and iOS SDK.mpkg”

And on a related note, when I screwed up experimenting with Xcode3 and 4 removing them became an issue: This mac developer tip worked like a charm though:

sudo <Xcode>/Library/uninstall-devtools --mode=all