The newest version of setuptools is 0.6b1 and has a number of fixes particularly relating to conflicts between "unmanaged" and "managed" packages
Projects are beginning to require setuptools >= 0.6a11 (python-kid in my case).
I'm trying to get the latest TurboGears into devel, which requires 0.6c2. Please bump.
Built -- will be out in the next extras push.