Are you using the Django python shell? That error means that your 
environment doesn't point to a settings file, which is handled by the Django 
shell.

Execute this command within your project directory (wherever you have the 
manage.py file):
python manage.py shell

It will open a Python interpretor that automatically loads your project 
settings, installed apps, and other Django infrastructure.

Also, make sure that Django installed on your pythonpath.

-Justin

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