** After the package has been installed in-place (using the develop command), how does one identify it as an in development project (or in development mode)? -- Case 3 and 6 touch on this topic (case 3 is a little vague at this time), but doesn't explain what type of action is intended. So if we install in-place (aka, develop), how does the python interpreter find the package? Are we using PYTHONPATH at this point (which would be contradict a requirement in case 6)?

There is an .egg-link file that will be used by pkg_resources to find the develop-installed packages, so my current implementation of develop command in packaging module also adds a .distinfo-link file in the site-packages which will be used to identify a project is installed in development mode or not.