Current thinking is to focus educational/scientific applications - interested beginners, include everything needed for starting
Please join the effort, there is lots of work to do!
At PyCon 2004, a BoF discussed ways to get grant money for Python development.
The initial target of the funding requests will be for the development of a "Fat Python" distribution. This will take the form of a bootable CDROM. The application on the CD will cover a variety of educational topics, in addition to teaching introductory computer programming. We plan to develop a demo version of the CDROM in parallel with writing a grant request for funding.
This project is discussed on the python-grants list.
See also PythonEducationalDistribution by the Seattle Python Interest Group. They are creating a Windows CD. Also, the Python EduSig list has discussed using Morphix to create a bootable custom CD. I would encourage you to get in touch with both these groups.