RPython... let's be serious. The code of pythonw.exe is very simple, see PC/WinMain.c.

No, pythonw.exe is not "meant to suppresses the terminal window on startup". This is only a consequence of being a "windows application". There is a lot of documentation about this, for example:
http://comsci.liu.edu/~murali/win32gui/Win32Apps.htm

- python.exe is a regular console application, with a main() function.
- pythonw.exe is a gui application, with a WinMain() function; as a consequence, stdout/stderr won't work properly.

Again, it's a won't fix for 2.7, unless someone comes with a patch. But this has already been tried, and be careful, different versions of the msvcrt differ in behavior here.