All,
I believe I must be doing something wrong. In the default install of Cturtle on Ubuntu 10.04, the setup.sh script doesn't jive well with an empty PYTHONPATH environmental variable. Here is my simple debugging test. Note the error on the first run of the python command.

cmansley@dice:~$ env | grep PYTHONPATH
cmansley@dice:~$ export ROS_ROOT=/opt/ros/cturtle/ros
cmansley@dice:~$ export PYTHONPATH=${ROS_ROOT}/core/roslib/src:${PYTHONPATH}
cmansley@dice:~$ env | grep PYTHONPATH
PYTHONPATH=/opt/ros/cturtle/ros/core/roslib/src:
cmansley@dice:~$ python
'import site' failed; use -v for traceback
Python 2.6.5 (r265:79063, Apr 16 2010, 13:57:41) 
[GCC 4.4.3] on linux2
Type "help", "copyright", "credits" or "license" for more information.
>>> Terminated
cmansley@dice:~$ unset PYTHONPATH
cmansley@dice:~$ python
Python 2.6.5 (r265:79063, Apr 16 2010, 13:57:41) 
[GCC 4.4.3] on linux2
Type "help", "copyright", "credits" or "license" for more information.
>>> Terminated
cmansley@dice:~$ 

I believe you need to test if the PYTHONPATH is empty before appending the colon, something like 

if [ -n ${PYTHONPATH} ]; then PYTHONPATH=:${PYTHONPATH} fi
export PYTHONPATH=${ROS_ROOT}/core/roslib/src${PYTHONPATH}

-chris