@Ronald: Ah, I see. So on Mac, Python 2.7 (with default site configuration) will not pickup packages installed in ~/.local, correct? It will, from now onwards, only consider ~/Library/Package as the user site directory? I ask because I just want to double check before modifying PyPM (which has ~/.local hardcoded in the client) to support this change.

@Tarek: I have user site enabled; didn't change anything .. just the default settings:
$ /tmp/apy27/bin/python -m site
sys.path = [
    '/home/sridharr/as/apy/trunk',
    '/tmp/apy27/lib/python27.zip',
    '/tmp/apy27/lib/python2.7',
    '/tmp/apy27/lib/python2.7/plat-linux2',
    '/tmp/apy27/lib/python2.7/lib-tk',
    '/tmp/apy27/lib/python2.7/lib-old',
    '/tmp/apy27/lib/python2.7/lib-dynload',
    '/home/sridharr/.local/lib/python/2.7/site-packages',
    '/tmp/apy27/lib/python2.7/site-packages',
    '/tmp/apy27/lib/python2.7/site-packages/setuptools-0.6c11-py2.7.egg-info',
]
USER_BASE: '/home/sridharr/.local' (exists)
USER_SITE: '/home/sridharr/.local/lib/python/2.7/site-packages' (exists)
ENABLE_USER_SITE: True

...

That is strange user site location - "python/2.7/site-packages" really? Shouldn't it be "python2.7/site-packages"?