If you're using a 64-bit version of Python 2.7, this is a known issue with the .exe installers built by distutils.  See: http://bugs.python.org/issue6792 for more details.

Apparently, there are registry keys that can be manually changed to fix this, but there isn't anything I can do on the setuptools end to fix this -- except to stop distributing .exe's for Windows, or to create separate 32 and 64 bit builds.

Sorry I can't be of more assistance at the moment.