I finally gave up trying to install to c:\Python25 and went with the install to C:\. However, I tried to install a module called pywin32 (Python for Windows Extensions) and after recognizing that the Python installation was in C:\ and saying it would install to C:\LIB\SITE- PACKAGES, it would then blow up. This was consistently repeatable. Seeing PythonWin mentioned regarding pywin32 reminded me of the ActiveState distribution of Python as I knew that came with PythonWin.
After uninstalling the python.org Python from C:\, I was able to successfuly install the ActiveState Python distribution to C: \Python25. -- http://mail.python.org/mailman/listinfo/python-list