pyvenv won't install setuptools because setuptools is not a stdlib package. Having packaging would have been nice, but that library was not in a good enough shape for the 3.3 release.

I don't understand what you try to do in the second traceback. Installing distribute works fine though:

1) Create environment using pyvenv: $ pyenv myenv
2) Download distribute archive from PyPI
3) Extract this archive
4) Install: $ cd distribute-0.6.28; ../pyenv/bin/python setup.py install

If you have a setup.py file where you want to use the distribute package you can use distribute_setup, as described in <http://pypi.python.org/pypi/distribute/#distribute-setup-py>. I'm using this in my own packages and this works fine with pyvenv as well.