I was struggling due to this problem for two days now and got the solution just now so thought I will share it
with you all; as I don’t want anyone else to land up in trouble as i did so I am using Hardy and was trying to build subvertpy from source as the package was not available for same.

The problem occurs due to absence of Python development headers as many python modules have dependency on  Python development headers to compile.

Solution is to install development headers using package manager; open the terminal and issue the following commands

and select the package that matches your installation as in my case it is python2.5-dev; issue the following command to install it

This will install development headers in /usr/include/python2.5 and now you can build your python module successfully.

Lets start with creating a directory where we want to install

you can manually download the installable from one of the available mirrors or you can use wget for same I prefer using wget

than we need to unzip the contents of the zip file and we are almost done

You can set the eclipse executable to your path

This is not the best way to do it but still does the job alternatively you can create a simple shell file and keep it in bin directory whcih just calls eclipse and you are good to go.