why are these exec times so different?

[r.e.s.]

To show that what I'm seeing isn't because of  
local/global differences, here are dummy functions 
that exhibit the same behavior.  (And I've tried to 
minimize os background activity, etc, when testing.)

The results are consistently repeatable:  For the 
given string s, f1(s) takes >10 times longer to run 
than f2(s) -- f1(s) and f2(s) return the same value, 
and contain essentially the same code, except that 
f2 calls function g to do the common inner loop:

def f1(s):
    """ do outer & inner loop """
    D = {}
    for i in xrange(len(s)):
        for j in xrange(len(s)-i+1):
            D[s[j:j+i]] = True
    return len(D)

def f2(s):
    """ same as f1, but call g to do inner loop """
    count = 0
    for i in xrange(len(s)):
        count += g(s,i)
    return count

def g(s,i):
    """ the common inner loop """
    D = {}
    for j in xrange(len(s)-i+1):
        D[s[j:j+i]] = True
    return len(D)

def string01(n):
    """Return first n chars of a fixed pseudorandom string."""
    random.seed(0)
    return ''.join([ random.choice('01') for i in xrange(n) ])

import random, time
s = string01(1000)
t0 = time.clock()
test, count = 'f1:', f1(s)
#test, count = 'f2:', f2(s)
t1 = time.clock()
print test, count, t1-t0