Paste uses pkg_resources.declare_namespace:

>>> import sys
>>> import paste
>>> paste.__path__
['/usr/local/lib/python2.5/site-packages/Paste-1.6-py2.5.egg/paste',  
'/usr/local/lib/python2.5/site-packages/PasteDeploy-1.3.1-py2.5.egg/ 
paste', '/usr/local/lib/python2.5/site-packages/PasteScript-1.6.2- 
py2.5.egg/paste']
>>> del sys.modules['paste']
>>> import paste
>>> paste.__path__
['/usr/local/lib/python2.5/site-packages/Paste-1.6-py2.5.egg/paste']

Whereas pkgutil.extend_path does the right thing and restores  
paste.__path__ to contain the 3 paths