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I'm interested, but have to ponder more, which will have to
wait until I'm back from vacation.

I expect that any hope to deprecate xrange() will prove
naive -- people will want to pass ranges around between
functions or reuse them (e.g. this happens a lot in timing
tests). Maybe in Python 3.0 I can make range() act as an
iterator generator. You'd have to say list(range(N)) to get
an actual list then.