I tried on a fresh XP on VM. I moved all dlls in C:\WINDOWS\WinSxS which are in the file handles shown by Process Explorer including the 3 CRT dlls to the my dist folder and the two subfolders suggested by http://wiki.wxpython.org/py2exe. It didn't work out. My app couldn't start. Windows XP gave a cryptic error asking me to reinstall the app.
After installing vcredist_x86.exe, my app starts fine. There isn't a choice here. You HAVE TO bundle vcredist_x86.exe with your installer and convince your customers that it is necessary to increase the file size by 2MB. If anyone figure out how to do as http://wiki.wxpython.org/py2exe, or on a Python compiled with a free GNU compiler, avoiding all these BS. I will pay him/her $10. -- http://mail.python.org/mailman/listinfo/python-list