Wubi doesn't run when another version of python is installed (no log or failure message shown)

[bcbc]

There have been a couple of support requests where the user report running Wubi and nothing happens. It turns out that when a different version of python is installed and the python path environment variable is set, Wubi will exit silently without reporting any error or creating a log file. The solution is to delete the environment variable.

For example: http://ubuntuforums.org/showthread.php?t=1815220
Reported symptoms:
Running the latest wubi.exe on Windows 7 x64
It creates a %temp%/pylXXX.tmp.exe file (with wubi logo) that it removes after ~1 second.
It creates a %temp%/pylXXX.tmp folder wich is empty and that is not removed.

Running in XP compatibility doesn't help, removing generated files don't work either.
The wubi process dies quite quick and after it gets ~4000kB memory usage

I don't find any log files