What's the difference between dist-packages and site-packages?

dist-packages is a Debian-specific convention that is also present in its derivatives, like Ubuntu. Modules are installed to dist-packages when they come from the Debian package manager into this location:

/usr/lib/python2.7/dist-packages

Since easy_install and pip are installed from the package manager, they also use dist-packages, but they put packages here:

/usr/local/lib/python2.7/dist-packages

From the Debian Python Wiki:

dist-packages instead of site-packages. Third party Python software installed from Debian packages goes into dist-packages, not site-packages. This is to reduce conflict between the system Python, and any from-source Python build you might install manually.

This means that if you manually install Python from source, it uses the site-packages directory. This allows you to keep the two installations separate, especially since Debian and Ubuntu rely on the system version of Python for many system utilities.

dist-packages is the debian-specific directory where apt and friends install their stuff, and site-packages is the standard pip directory.

The problem is -- what happens when different versions of the same package are present in different directories?

My solution to the problem is to make dist-packages a symlink to site-packages:

for d in $(find $WORKON_HOME -type d -name dist-packages); do
  pushd $d
  cd ..
  if test -d dist-packages/__pycache__; then
    mv -v dist-packages/__pycache__/* site-packages/__pycache__/
    rmdir -v dist-packages/__pycache__
  fi
  mv -v dist-packages/* site-packages/
  rmdir -v dist-packages
  ln -sv site-packages dist-packages
  popd
done

(if you are not using gnu tools, remove the -v option).