David, the system python variables needs to be removed from the environment before starting the o4w python. To see the existing python env, open a command prompt and type:
set |findstr /i "python"
If you see something like the below you'll have a conflict with the Osgeo4W python:
Path=C:\Python26;C:\Python26\Scripts;C:\Windows\system32;C:\Windows;C:\Windows\System32\Wbem;C:\Windows\sysWOW64
PYTHONHOME=C:\Python26
PYTHONPATH=C:\Python26;C:\Python26\Lib;C:\Python26\DLLs
To fix this you'll need to remove the existing python settings from the system default ([Winkey]-[pause/break] > Advanced > Environment) or take care to always start python from inside a new shell which resets those variables, e.g. from a batch file:
@echo off
set PYTHONHOME=
set PYTHONPATH=
set PATH=C:\Windows\system32;C:\Windows;C:\Windows\System32\Wbem;C:\Windows\sysWOW64;
call c:\osgeo4w\osgeo4w.bat
