Yeah, this is turning into a discussion just between the two of us :-) I'll ask for other opinions on virtualenv-list and pypa-dev, to see if that helps. I see your point regarding the change in behaviour, though. And actually the change was pretty trivial - either approach is possible.

The idea of installing an older version is probably not going to be relevant until pip 1.6 comes out though, as with this change virtualenv won't even work with versions of pip before 1.5. The situation might be different with setuptools, I don't follow setuptools versions closely. But that doesn't mean we can arbitrarily change behaviour without checking with people.