Works for me?

gistfile1.py

fatalii 209 % date
Thu Jul 26 17:20:56 CDT 2012
fatalii 210 % sw_vers
ProductName:	Mac OS X
ProductVersion:	10.8
BuildVersion:	12A269
fatalii 211 % curl -LO 'https://raw.github.com/pypa/virtualenv/master/virtualenv.py'
  % Total    % Received % Xferd  Average Speed   Time    Time     Time  Current
                                 Dload  Upload   Total   Spent    Left  Speed
100  105k  100  105k    0     0   100k      0  0:00:01  0:00:01 --:--:--  186k
fatalii 212 % /usr/bin/python virtualenv.py --distribute /tmp/workie
New python executable in /tmp/workie/bin/python
Installing distribute..................................................................................................................................................................................................done.
Installing pip......................done.
fatalii 213 % cd /tmp/workie
/tmp/workie
fatalii 214 % bin/pip install web.py
Downloading/unpacking web.py
  Downloading web.py-0.37.tar.gz (90Kb): 90Kb downloaded
  Running setup.py egg_info for package web.py
    
Installing collected packages: web.py
  Running setup.py install for web.py
    
Successfully installed web.py
Cleaning up...
fatalii 215 % bin/python
Python 2.7.2 (default, Jun 20 2012, 16:23:33) 
[GCC 4.2.1 Compatible Apple Clang 4.0 (tags/Apple/clang-418.0.60)] on darwin
Type "help", "copyright", "credits" or "license" for more information.
>>> import web
>>> urls = ('/(.*)', 'hello')
>>> app = web.application(urls, globals())
>>> class hello:
...     def GET(self, name):
...         if not name: name = 'World'
...         return 'Hello, ' + name + '!'
... 
>>> app.run()
http://0.0.0.0:8080/