After running http://web2py.googlecode.com/hg/scripts/setup-web2py-ubuntu.sh
on ubuntu 10.10 and setting up a postgres db for an app, I was getting
"global name 'psycopg2' is not defined". Fixed it with:

    apt-get install python-psycopg2
    sudo /etc/init.d/apache2 restart

For 10.10, the line

    apt-get -y install python2.5-psycopg2

...should read:

    apt-get -y install python-psycopg2

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