Evan checked in *his* version of setpath.py, which broke for me.

To prevent this in the future, read the path from a file .path.

lib/python/TAL/setpath.py

 """
-Edit this file to set the proper module search path.
+Read a module search path from .path.
 """
 import os
 import sys
+import string
 
-home = os.path.expanduser("~")
-Zopes = os.path.join(home, 'Zope')
-pt = os.path.join(Zopes, 'pt')
-libPython = os.path.join(pt, 'lib', 'python')
-
-sys.path.append(libPython)
+dir = os.path.dirname(__file__)
+path = os.path.join(dir, ".path")
+try:
+    f = open(path)
+except IOError:
+    raise IOError, "Please edit .path to point to <Zope2/lib/python>"
+else:
+    for line in f.readlines():
+        line = string.strip(line)
+        if line and line[0] != '#':
+            for dir in string.split(line, os.pathsep):
+                dir = os.path.expanduser(os.path.expandvars(dir))
+                if dir not in sys.path:
+                    sys.path.append(dir)
 
 import ZODB # Must import this first to initialize Persistence properly