One book recommended by AlexMartelli and others present: Magnus Lei Hetland, Practical Python
There's an education SIG, complete with mailing list: [http://python.org/sigs/edu-sig/ EduSig]
Also useful is the free writing at [http://ibiblio.org/obp/pyBiblio pyBiblio] (part of iBiblio, formerly SunSite).
We could really use some success stories of Python in education.