The recommended steps from Bruce Kroeze works perfectly with a few minor modifications. Here are the steps I took to make it work. Check out Bruce's link post for detail explanations.

# Get the code and some other prep works
mkdir ~/tmp
cd ~/tmp
wget http://jaist.dl.sourceforge.net/sourceforge/cheetahtemplate/Cheetah-2.0rc7.tar.gz

# Build Cheetah without copying it to system wide site-package
tar xzf Cheetah-2.0rc7.tar.gz
cd Cheetah-2.0rc7.tar.gz
python setup.py bdist_dumb --relative

# Setup the environment
cd dist
mv lib ~/
mv bin ~/
vim ~/.bash_profile
PATH=$PATH:~/bin
PYTHONPATH=$PYTHONPATH:~/lib/python2.4/site-packages
export PATH PYTHONPATH
source ~/.bash_profile

# Final step: create the symbolic link
cd ~/web/public/{your_web_project}
ln -s ~/lib/python2.4/site-packages/Cheetah .