What I am trying to nail down is exactly what needs doing to get us from where we are now to where capabilities actually work. As I understand it, what is needed is:
a) Fix restricted execution, which is in a state of disrepair
Yes.
b) Override import, open (and other stuff? what?)
Don't worry about this; it's taken care of by the rexec module; each application will probably want to do this a little differently (certainly Zope has its own way).
c) Wrap or replace some of the existing libraries, certify that others are "safe"
This should only be necessary for (core and 3rd party) extension modules. The rexec module has a framework for this.
It looks to me like a and b are shared with proxies, and c would be different, by definition. Is there anything else? Am I on the wrong track?
I don't know why you think (c) is different.
I am going to write this all up into a document which can be used as a starting point for work to complete this.
Excellent. --Guido van Rossum (home page: http://www.python.org/~guido/)