It seems like in the haste of installing 3.2 beta, together with the latest 3.1.3 can crash your Xcode build settings.

It is highly recommended that you install beta SDKs in separate folders as compared to the standard /Developer for the released SDKs.  Found this out the hard way, and now all my build codes are default to /Users as compared to the usual /3.1.3 The mixed up is too painful to comprehend. “Ouch” X!

Found some information regarding this at the Apple support. I will try to remove all traces of the beta.  Do comment if you have discover any work around.

Additional info from tuaw  here