When I upgraded to Xcode 3.2 along with Snow Leopard, the output to the console was filled with apparently random garbage, and lots of white space. This also happened in Safari when a page used a fixed space font. I don't know exactly what was going on, but I think that at some point I had set both of these font sets to some version of either Monoco or Courier, and when I installed Snow Leopard, the particular font I had used went away which confused the applications in question.
Anyway, I went to the Debugger preference tab in Xcode (not the Fonts & Colors tab) and changed all the various console fonts to be some variant of Menlo. Similarly, in Safari, I set the Fixed Width Font to Menlo-13, and all was right with my world.
[Update: this also affected the AppleScript Editor, and the font was Courier]
{Update 2: Further investigation using the Font Book application found two conflicting copies of Courier /System/Library/Fonts/Courier.dfont with a modification date of July 2009 and /Library/Fonts/Courier TU with a modification date in June 1996. Removing the older font and restarting my apps has fixed the problem.]
