Does version 1.2r1 have an installation bug for non-package installs?

I have made a typescript file while I tried to install the latest version of Mnemosyne. I believe I have installed all the required dependencies. When I follow the README instructions I get an error. After typing 'python setup.py install' w/o the single quotes I get the following error, also included at the end of my typescript file:

Traceback (most recent call last):

  File "setup.py", line 4, in ?

    from setuptools import setup

ImportError: No module named setuptools

*** typescript file begin***

Script started on Mon 06 Apr 2009 06:29:08 AM CDT
justin@localhost:/home/justin/Desktop/mnemosyne-1.2\[root@localhost mnemosyne-1.2]# yum info python

Loaded plugins: fastestmirror, priorities

Loading mirror speeds from cached hostfile

 * rpmforge: apt.sw.be

 * base: www.cyberuse.com

 * updates: ftp.lug.udel.edu

 * addons: mirrors.liquidweb.com

 * extras: mirror.fdcservers.net

382 packages excluded due to repository priority protections

Installed Packages

Name : python

Arch : i386

Version : 2.4.3

Release : 24.el5

Size : 21 M

Repo : installed

Summary : An interpreted, interactive, object-oriented programming language.

justin@localhost:/home/justin/Desktop/mnemosyne-1.2\[root@localhost mnemosyne-1.2]# yum info qt

Loaded plugins: fastestmirror, priorities

Loading mirror speeds from cached hostfile

 * rpmforge: ftp-stud.fht-esslingen.de

 * base: www.cyberuse.com

 * updates: ftp.lug.udel.edu

 * addons: mirrors.liquidweb.com

 * extras: mirror.fdcservers.net

382 packages excluded due to repository priority protections

Installed Packages

Name : qt

Arch : i386

Epoch : 1

Version : 3.3.6

Release : 23.el5

justin@localhost:/home/justin/Desktop/mnemosyne-1.2\[root@localhost mnemosyne-1.2]# yum info python-game

Loaded plugins: fastestmirror, priorities

Loading mirror speeds from cached hostfile

 * rpmforge: ftp-stud.fht-esslingen.de

 * base: www.cyberuse.com

 * updates: ftp.lug.udel.edu

 * addons: mirrors.liquidweb.com

 * extras: mirror.fdcservers.net

382 packages excluded due to repository priority protections

Installed Packages

Name : python-game

Arch : i386

Version : 1.8.1

Release : 1.el5.rf

Size : 2.5 M

Repo : installed

justin@localhost:/home/justin/Desktop/mnemosyne-1.2\[root@localhost mnemosyne-1.2]# pwd

/home/justin/Desktop/mnemosyne-1.2

justin@localhost:/home/justin/Desktop/mnemosyne-1.2\[root@localhost mnemosyne-1.2]# uname -a

Linux localhost.localdomain 2.6.18-128.1.6.el5 #1 SMP Wed Apr 1 09:19:18 EDT 2009 i686 i686 i386 GNU/Linux

_justin@localhost:/home/justin/Desktop/mnemosyne-1.2\[root@localhost mnemosyne-1.2]# python setup.py install

Traceback (most recent call last):

  File "setup.py", line 4, in ?

    from setuptools import setup

ImportError: No module named setuptools

_justin@localhost:/home/justin/Desktop/mnemosyne-1.2\[root@localhost mnemosyne-1.2]# exit

Script done on Mon 06 Apr 2009 06:31:33 AM CDT

*** typescript file done ***