Fix for "pip" detection so that setuptools is used

I am no "expert" with pip deployment, but this bug seems rather obnoxious.
If there is a better way to detect the usage of pip, please reject this pull request
and use it instead.  I do think that pip installation should not require the exporting
of env variables to be successful.  It seems the core is that pip _requires_ setuptools and 
unless USE_SETUPTOOLS is set in environment variables pip fails.

The issue appears on 12.04 Ubuntu and OS X for sure.  I am sure we will see it other places as well.