diff -r c3549f6c4a6e -r e14d4c28bb03 Doc/library/venv.rst
--- a/Doc/library/venv.rst	Tue Oct 02 10:16:26 2012 +0200
+++ b/Doc/library/venv.rst	Tue Oct 02 11:46:40 2012 +0100
@@ -75,8 +75,8 @@
     * ``system_site_packages`` -- a Boolean value indicating that the system Python
       site-packages should be available to the environment (defaults to ``False``).
 
-    * ``clear`` -- a Boolean value which, if True, will delete any existing target
-      directory instead of raising an exception (defaults to ``False``).
+    * ``clear`` -- a Boolean value which, if True, will delete the contents of
+      any existing target directory, before creating the environment.
 
     * ``symlinks`` -- a Boolean value indicating whether to attempt to symlink the
       Python binary (and any necessary DLLs or other binaries,
@@ -88,7 +88,6 @@
       upgraded in-place (defaults to ``False``).
 
 
-
     Creators of third-party virtual environment tools will be free to use the
     provided ``EnvBuilder`` class as a base class.
 
diff -r c3549f6c4a6e -r e14d4c28bb03 Lib/test/test_venv.py
--- a/Lib/test/test_venv.py	Tue Oct 02 10:16:26 2012 +0200
+++ b/Lib/test/test_venv.py	Tue Oct 02 11:46:40 2012 +0100
@@ -113,13 +113,68 @@
             out, err = p.communicate()
             self.assertEqual(out.strip(), expected.encode())
 
+    if sys.platform == 'win32':
+        ENV_SUBDIRS = (
+            ('Scripts',),
+            ('Include',),
+            ('Lib',),
+            ('Lib', 'site-packages'),
+        )
+    else:
+        ENV_SUBDIRS = (
+            ('bin',),
+            ('include',),
+            ('lib',),
+            ('lib', 'python%d.%d' % sys.version_info[:2]),
+            ('lib', 'python%d.%d' % sys.version_info[:2], 'site-packages'),
+        )
+
+    def create_contents(self, paths, filename):
+        """
+        Create some files in the environment which are unrelated
+        to the virtual environment.
+        """
+        for subdirs in paths:
+            d = os.path.join(self.env_dir, *subdirs)
+            os.mkdir(d)
+            fn = os.path.join(d, filename)
+            with open(fn, 'wb') as f:
+                f.write(b'Still here?')
+
     def test_overwrite_existing(self):
         """
-        Test control of overwriting an existing environment directory.
+        Test creating environment in an existing directory.
         """
-        self.assertRaises(ValueError, venv.create, self.env_dir)
+        self.create_contents(self.ENV_SUBDIRS, 'foo')
+        venv.create(self.env_dir)
+        for subdirs in self.ENV_SUBDIRS:
+            fn = os.path.join(self.env_dir, *(subdirs + ('foo',)))
+            self.assertTrue(os.path.exists(fn))
+            with open(fn, 'rb') as f:
+                self.assertEqual(f.read(), b'Still here?')
+
         builder = venv.EnvBuilder(clear=True)
         builder.create(self.env_dir)
+        for subdirs in self.ENV_SUBDIRS:
+            fn = os.path.join(self.env_dir, *(subdirs + ('foo',)))
+            self.assertFalse(os.path.exists(fn))
+
+    def clear_directory(self, path):
+        for fn in os.listdir(path):
+            fn = os.path.join(path, fn)
+            if os.path.islink(fn) or os.path.isfile(fn):
+                os.remove(fn)
+            elif os.path.isdir(fn):
+                shutil.rmtree(fn)
+
+    def test_unoverwritable_fails(self):
+        #create a file clashing with directories in the env dir
+        for paths in self.ENV_SUBDIRS[:3]:
+            fn = os.path.join(self.env_dir, *paths)
+            with open(fn, 'wb') as f:
+                f.write(b'')
+            self.assertRaises((ValueError, OSError), venv.create, self.env_dir)
+            self.clear_directory(self.env_dir)
 
     def test_upgrade(self):
         """
diff -r c3549f6c4a6e -r e14d4c28bb03 Lib/venv/__init__.py
--- a/Lib/venv/__init__.py	Tue Oct 02 10:16:26 2012 +0200
+++ b/Lib/venv/__init__.py	Tue Oct 02 11:46:40 2012 +0100
@@ -90,6 +90,14 @@
             self.setup_scripts(context)
             self.post_setup(context)
 
+    def clear_directory(self, path):
+        for fn in os.listdir(path):
+            fn = os.path.join(path, fn)
+            if os.path.islink(fn) or os.path.isfile(fn):
+                os.remove(fn)
+            elif os.path.isdir(fn):
+                shutil.rmtree(fn)
+
     def ensure_directories(self, env_dir):
         """
         Create the directories for the environment.
@@ -101,11 +109,11 @@
         def create_if_needed(d):
             if not os.path.exists(d):
                 os.makedirs(d)
+            elif os.path.islink(d) or os.path.isfile(d):
+                raise ValueError('Unable to create directory %r' % d)
 
-        if os.path.exists(env_dir) and not (self.clear or self.upgrade):
-            raise ValueError('Directory exists: %s' % env_dir)
         if os.path.exists(env_dir) and self.clear:
-            shutil.rmtree(env_dir)
+            self.clear_directory(env_dir)
         context = Context()
         context.env_dir = env_dir
         context.env_name = os.path.split(env_dir)[1]
@@ -369,11 +377,10 @@
                                  'when symlinks are not the default for '
                                  'the platform.')
         parser.add_argument('--clear', default=False, action='store_true',
-                            dest='clear', help='Delete the environment '
-                                               'directory if it already '
-                                               'exists. If not specified and '
-                                               'the directory exists, an error'
-                                               ' is raised.')
+                            dest='clear', help='Delete the contents of the '
+                                               'environment directory if it '
+                                               'already exists, before '
+                                               'environment creation.')
         parser.add_argument('--upgrade', default=False, action='store_true',
                             dest='upgrade', help='Upgrade the environment '
                                                'directory to use this version '