How about using the same convention Python itself does?
Debug and release outputs go into the same directory (as they have different names - _d for debug). This allows people to add the build directory to their sys.path, and have it work for both debug and release.
Build\Temp\Release and Build\Temp\Debug are where the intermediate files go. This makes it easy to manually clean your file system - one directory and all temp files are gone.
It seems my description was unclear: Intermediate files go into build\temp.win32\Release... or build\temp.win32\Debug... These are: .obj, .lib, .exp files.
Debug and Release outputs go into the same directory, debug versions have _d appended.
Cleaning files: distutils now has a clean command (which will delete build\temp.win32 directory): Manual cleaning not needed.