I just installed the latest and greatest trac software on a new server I'm building. In this case, I wanted to install to a separate directory, so I followed these directions:
And also updated my PYTHONPATH environment variable, but I'm sure if I had to. Unfortunately, I jumped the gun and installed it to my debian base prior to doing the custom install. I've heard that easy_install and debian don't get along terribly well, which is really too bad, as I'm obviously a huge fan of debian, and at the same time enjoying python more and more.
To sum up some other notes about how I use trac, I set it up with Apache 2.2, mod_fcgid, and VirtualScriptAlias. Although its not totally automagic, its pretty darn close, and runs very well. I finally am now able to use trac with mysql, and that is really awesome too.
UPDATE December 5, 2007: The file required to have a different python location is: altinstall.pth in the site-packages folder.