I'm back to dealing with the incompatibility between setuptools and svn 1.5 which I have installed. Last time I've solved the problem by doing a svn checkout of http://svn.python.org/projects/sandbox/branches/setuptools-0.6/ and running sudo python setup.py install. Now I'm trying to do setup a virtualenv to play with repoze.catalog and I'm hitting the same problem. Of course, virtualenv comes with a hardcoded setuptools package and so it will setup a "broken" setuptools in the virtual environment. The solution is of course the same, adapted to use the virtualenv python script:

virtualenv myenv
cd myenv
svn co http://svn.python.org/projects/sandbox/branches/setuptools-0.6/ setuptools
cd setuptools
../bin/python setup.py install

This will upgrade the easy_install script to use the new setuptools library