Windows distribution suggestions?

As what must be penance for something or other, I'm needing to release
a Python app for use under Windows XP. Please be gentle with me since
I'm a Un*x weenie and the only thing I've had much practice with under
Windows is rebooting it.

My app contains three different programs (say alice.py, bob.py, and
carol.py) that need to be independently launchable, and a dozen or so
other .py files that get imported into those first three. What I'd
really really like is to make a single installer called (say)
"app.exe". Launching app.exe should completely install Python, unpack
all the necessary modules, and make three icons (alice, bob, carol) on
the desktop.

I know there's various ways of building Windows distros like that, but
am not sure what's currently preferred. Gordon McMillan's site
www.mcmillan-inc.com has had its domain expire (he really should renew
it before some squatter grabs it!) and the mirror that I've found
indicates that it was last updated for Python 2.3. I wrote my app
under 2.4 and while I don't think I depend heavily on any 2.4
features, I'd rather not have to downgrade just to make this exe
installer. There's also py2exe--is that as good?

Also, what's the preferred way of releasing updates? That is, let's
say I want to update my .py files and release a new version fairly
frequently--should I just make a new .exe every time? Would launching
the new one cleanly overwrite or uninstall the old one? Total
coolness would be a way to ship an "update.py" along with the app,
that syncs the app up to a Subversion repository, but that may be
asking a bit much.

I do have Visual C++ installed on the development machine, if that helps.
.

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