Problem 1:
The .manifest information for the VC runtime dll's has been changed in the recent versions of the 2.7.x 64-bit installers for Windows. Python fails to run on a clean Win2008R2 install after running the Python installer to install "Just for me". The installation succeeds if "Install for all users" is selected.

After install completes, trying to run python results in:
The application has failed to start because it's side-by-side configuration is incorrect. Please see the application event log or use the command-line sxstrace.exe tool for more detail.

The event viewer log shows:
Activation context generation failed for "C:\Python27\python.exe".Error in manifest or policy file "C:\Python27\Microsoft.VC90.CRT.MANIFEST" on line 4. Component identity found in manifest does not match the identity of the component requested. Reference is Microsoft.VC90.CRT,processorArchitecture="amd64",publicKeyToken="1fc8b3b9a1e18e3b",type="win32",version="9.0.21022.8". Definition is Microsoft.VC90.CRT,processorArchitecture="amd64",publicKeyToken="1fc8b3b9a1e18e3b",type="win32",version="9.0.30729.1". Please use sxstrace.exe for detailed diagnosis.

This means that that VC2008 SP1 dll and manifest are included in the installer, but the Python.exe is compiled against VC2008 (_not_ SP1).
Replacing the installed manifest and VC90 with one pulled from an older distribution with the correct 9.0.21022.8 version enables python to run.

Problem 2:
The compiled DLLs in the DLLs folder incorrectly have the VC manifest included in them as well. This breaks the side-by-side look up, since the VC90 dll is not in the DLLs folder. So if you try to import socket, you get an error message like:
Traceback (most recent call last):
  File "hub\scripts\pgc.py", line 9, in <module>
    import socket
  File "C:\Python27\lib\socket.py", line 47, in <module>
    import _socket
ImportError: DLL load failed: The application has failed to start because its side-by-side configuration is incorrect. Please see the application event log or use the command-line sxstrace.exe tool for more detail.

Previous versions of Python for windows have had this problem but it was corrected. It looks like it has crept back in.