[Distutils] Bad tracebacks from packages installed using setuptools

[Phillip J. Eby]

At 12:16 PM 5/12/2008 -0400, Andreas Klöckner wrote:
>At least two things are bad here:
>
>- Some source files refer to their relative location in the build 
>directory of
>their *own* package. Unsurprisingly, this is not found when an exception
>occurs in user code that does not live in the package's base directory.
>
>- Whenever a file name is __init__.py, the PIL __init__.py gets picked up
>instead of the corect file name. (nothing uses PIL in what generated the
>above)
>
>What can I do to fix this? (setuptools 0.6c8 on 2.5)

The first can only be fixed by installing files unzipped; the second 
I've never seen before and have no idea about.