You will need to have compiled and installed libxml into /usr/local/ or if you are on Mac's Tiger, you can change the path to /usr and that should do ya.
./configure --enable-memory-limit --with-layout=GNU --with-config-file-scan-dir=/usr/local/etc/php --disable-all --enable-libxml --with-libxml-dir=/usr/local --enable-spl --with-regex=php --disable-cli --enable-force-cgi-redirect --enable-fastcgi
And you don't want to leave that /usr/local/bin/php binary sitting there because it's cgi-fcgi, you're going to replace it with php-cli
mv /usr/local/bin/php /usr/local/bin/php-fcgi
/usr/local/bin/php-fcgi is then the binary you use for all PHP CGI and FCGI.