My own personal experience with this bug required me to run "sudo /bin/rm /var/lib/python-support/python2.5/twisted/__init__.py" in order to work-around the problem. The same situation arose for a couple of other users of the Tahoe-LAFS app (which uses Twisted and Nevow).
According to http:// allmydata. org/pipermail/ tahoe-dev/ 2009-August/ 002551. html this situation with the bogus __init__.py file doesn't cause a problem as long as the correct "twisted" directory appears earlier on the PYTHONPATH.
My own personal experience with this bug required me to run "sudo /bin/rm /var/lib/ python- support/ python2. 5/twisted/ __init_ _.py" in order to work-around the problem. The same situation arose for a couple of other users of the Tahoe-LAFS app (which uses Twisted and Nevow).