The useful code snipet that can be included in the .htaccess file or in the apache conf files, so that .py files and other files can be placed in the same directory.
<Directory /var/www/py>
SetHandler mod_python
PythonHandler mod_python.publisher
PythonDebug On
<Files ~ "\.(gif|html|jpg|png)$">
SetHandler default-handler
</Files>
</Directory>
Links
http://webpython.codepoint.net/mod_python_publisher_apache_configuration
http://www.phpbb.com/community/viewtopic.php?f=46&t=1139555
http://httpd.apache.org/docs/2.0/mod/core.html#sethandler
