Adrian, Thanks and I got it. Just to document for people who come after me - I did all these tests from within mod_python as well as outside it.
First off python version - from within mod_python and I looked all over I can't find any other versions "2.4.1 (#1, May 16 2005, 15:19:29) [GCC 4.0.0 20050512 (Red Hat 4.0.0-5)]" If within a python shell I do a from pysqlite2 import dbapi2 it's all good. dbapi2.version reponds 2.06. But I checked it with mod_python and I get the error that ends in the " permission denied './python-eggs' ". This all exposes more lack of knowledge, but I'm cool with that. Pysqlite2 is in an egg in the site-packages. This is the important part - mod_python doesn't like zipped eggs. Unzip it, did some cleanup of the easy_install.pth, restart apache, and it's all good. Thanks again. -mhale