Apple broke the compiler suite on Mac OS X 10.3. As part of a security update they shipped a new version of libstdc++ -- which was built using a different ABI than the compilers for 10.3, and they weren't going to update the compilers for 10.3. (Some sort of GCC ABI flag day happened.)
You could still build programs for 10.3 -- but you needed the latest version of Xcode and the compilers for that, which Apple only shipped for 10.4 and up. So you had to set Xcode for 10.3 compatibility mode and then you could build your app.
If you develop for Apple's platform, you need to be running the latest version, period, end of statement. If you aren't, there's no telling what may break.