run_test.sh fails to install venv with most recent version of pip (1.2)

I get the following error on Nova master if I try run run_tests.sh and create a new .venv:

Patching...

Renaming /home/dprince/projects/nova/.venv/lib/python2.7/site-packages/setuptools-0.6c11-py2.7.egg into /home/dprince/projects/nova/.venv/lib/python2.7/site-packages/setuptools-0.6c11-py2.7.egg.OLD.1346981692.61

Patched done.

Relaunching...

Traceback (most recent call last):

  File "<string>", line 1, in <module>

NameError: name 'install' is not defined

----------------------------------------
Command /home/dprince/projects/nova/.venv/bin/python -c "import setuptools;__file__='/home/dprince/projects/nova/.venv/build/distribute/setup.py';exec(compile(open(__file__).read().replace('\r\n', '\n'), __file__, 'exec'))" install --record /tmp/pip-_X9xLm-record/install-record.txt --single-version-externally-managed --install-headers /home/dprince/projects/nova/.venv/include/site/python2.7 failed with error code 1 in /home/dprince/projects/nova/.venv/build/distribute
Storing complete log in /home/dprince/.pip/pip.log
Command "tools/with_venv.sh pip install --upgrade distribute" failed.
None

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Looks like the most recent version of pip (1.2.1) is the cause of the issue.