Hi, I have seen you struggle setting up a deployment environment and deploying your web2py app for some time now, and wonder why you not simply decide to deploy your app at e.g Webfaction. Apart from my Mac OS X Leopard Server I do have a hosting account there at $ 9.50 a month, and in order to be able to access web2py's admin interface I also have a dedicated IP address at $ 5.00 a month. Webfaction has a script to install web2py, apart form that there documentation and support are pretty good. I found that being new to web2py, probably dynamic web development, and setting up a deployment environment is an unproductive combination. After you've become more familiar with the former the latter will be a piece of cake.
By the way, in production you do not use SQLite (see the book), but Postgresql, MySQL, etc. Kind regards, Annet