Quoting Python 2.6 Ubuntu changelog:
"* For locally installed packages, create a directory
/usr/local/lib/python2.6/dist-packages. This is the default for
installations done with distutils and setuptools. Third party stuff
packaged within the distribution goes to /usr/lib/python2.6/dist-packages.
There is no /usr/lib/python2.6/site-packages in the file system and
on sys.path. No package within the distribution must not install
anything in this location.
"
I guess what happens is:
* virtualenv creates only $ENV/usr/lib/python2.6/site-packages because it 
doesn't check where Python distribution expects local packages to go.
* then virtualenv invokes setuptools which looks for 
$ENV/usr/local/lib/python2.6/dist-packages/ and bails out.

Correct me if I'm wrong, this is what i've deducted after short work
with virtualenv-1.3.3.

virtualenv still works with python 2.5 because dist-packages and whole
split into /usr/local/ vs. /usr/ was made in Python 2.6.. Well,
according to changelogs.

-- 
python-virtualenv doesn't work with Python 2.6.x
https://bugs.launchpad.net/bugs/339904
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