on ubuntu (and also on osx) i run from the command line. my command looks like this:
python2.5 /home/cfhowes/tools/gae/google_appengine/dev_appserver.py --datastore_path /home/cfhowes/clients/test/db/dev_appserver_sqlite.datastore --blobstore_path /home/cfhowes/clients/test/db/test.blobstore --use_sqlite /home/cfhowes/clients/test/source/web2py i have only had good success with python2.5. good luck, cfh
