Rather than using setuptools non standard way of proceeding, it is possible to directly rely on distutils setup's function, using the scripts argument, as stated here: http://docs.python.org/distutils/setupscript.html#installing-scripts

from distutils import setup
setup(
    ...,
    scripts=['path/to/your/script',],
    ...
)

It allows you to stay compatible a) with all python versions and b) not having to rely on a setuptools as an external dependency.

Yes, this is possible and quite common for packages that serve as both command-line tools and imported libraries.

In setup.py, add a module's function as an entry point:

setuptools.setup(
    ...
    entry_points={'console_scripts': [
        'foo = my_package.some_module:main_func',
    ]},
    ...
)

To create a script named foo that calls the my_func function inside of my_package.some_module. Read more at https://pythonhosted.org/setuptools/setuptools.html#automatic-script-creation.

It is also a convention it to add:

#!/usr/bin/env python

...

if __name__ == '__main__':
    my_func()

to the modules that can be called as "scripts" where my_func is the function you'd like to call externally.

Here is an example of setup.py:

https://github.com/jacebrowning/gdm/blob/fa998167f5f6de64bc8bdfd8b9433870d79ef814/setup.py#L28-L31

and a callable module:

https://github.com/jacebrowning/gdm/blob/fa998167f5f6de64bc8bdfd8b9433870d79ef814/gdm/cli.py#L161-L162

You need relative imports. Try

from .. import mypackage

or

from ..mypackage import server

The documentation is here

http://docs.python.org/tutorial/modules.html#intra-package-references

These work on Python 2.5 or newer.

To do it only in the development version, try:

try:
    from my_package import server
except ImportError:
    from ..my_package import server

Its mainly used to define the additional scripts you'll be using in your package. Here's a snippet from the official documentation on python-packaging:

#!/usr/bin/env python
import funniest 
print funniest.joke() 

Then we can declare the script in setup() like this:

setup(
    ...
    scripts=['bin/funniest-joke'],
    ... 
    ) 

When we install the package, setuptools will copy the script to our PATH and make it available for general use. This has advantage of being generalizeable to non-python scripts, as well: funniest-joke could be a shell script, or something completely different.