The psyco module has been around for a while and has been used to speed up the Python interpreter. For those of you who think speed is all important, take a look at a typical example. Psyco is similar to Java's just in time compiler.
How does psyco do it? Well, Python normally compiles source code to byte-code. Byte-code is machine code for the Python Virtual Machine (PVM). Byte-code is cross platform and works on many different CPU types. The interpreter then takes the byte-code and translates it to CPU specific machine code for execution of the program.
Psyco works only on Intel i386 CPU machines, as it compiles much of the Python source code directly to i386 machine code. This takes the load off the interpreter and speeds things up about 2 to 100 times.