Version:           3.4.0 (using KDE KDE 3.5.6)
Installed from:    Debian testing/unstable Packages
OS:                Linux

when I try to compile a "simple 'Hello World'" project, KDevelop enter
in a infinite loop (100% cpu) and eat all memory and swap.
The problem occur when it run /bin/sh ../libtool --tag=CXX --mode=link g++ -O0 -g3 -o hello hello.o
And in fact, if I run this command in a console, the same problem occur.
I try to use the libtool scrip provided by libtool packege in /usr/bin :
/bin/sh /usr/bin/libtool --tag=CXX --mode=link g++ -O0 -g3 -o hello hello.o
and it build and run without problem, so I guess libtool provided with
kdevelop is in fault.

===========
Workaround
===========
If the building configuration is Debug then the command is:
"*" is the path of the project

cd '*/debug/src' && WANT_AUTOCONF_2_5="1" WANT_AUTOMAKE_1_6="1" make -k test.lo
if /bin/sh ../libtool --mode=compile g++ -DHAVE_CONFIG_H -I. -I/*/src -I.. -O0 -g3 -MT test.lo -MD -MP -MF ".deps/test.Tpo" -c -o test.lo `test -f '*/src/test.cpp' || echo '*/src/'`*/src/test.cpp; then mv -f ".deps/test.Tpo" ".deps/test.Plo"; else rm -f ".deps/test.Plo"; exit 1; fi

. Seems that indeed libtool is the problem causing the infinite loop so remove kdevelop libtool script(made by configure) and adding a link to /ust/bin/libtool fixes the problem:
cd debug; rm libtool; ln -s /usr/bin/libtool libtool;

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This bug is also reported on debian bugs: http://bugs.debian.org/cgi-bin/bugreport.cgi?bug=351358 and may be a Debian only bug