I'm getting closer now. I figured out that when I typed python in cmd.exe window it was trying to run the cygwin version of python. I removed that link and cmd.exe now finds the correct version.
Therefore, this is not a bug. However, someone should add a caution in the installation instructions for those of us using cygwin on windows. Thanks:) SA -- http://mail.python.org/mailman/listinfo/python-list