The bug in the pure Java SQLiteJDBC driver that caused an “out of memory” error when trying to connect to a SQLite database using standard windows drive letters (e.g. c:\kettle\mydata.db) is now fixed. The current version (V037) has also been updated to SQLite version 3.4.2. To use the latest driver within Kettle, download the file from here, go to the ../libext/JDBC folder, delete the included sqlitejdbc-v023-nested.jar and replace with sqlitejdbc-v027-nested.jar.
Matt Casters of the Pentaho Kettle team left a comment to say version 2.5.2 and version 3.0.0-RC2 will ship with the sqlitejdbc-v027-nested.jar