Ah I forgot about some of those references in the CMake files, I'll clean those out. Right now, on windows there's no really easy way to find boost, but if we get everything in a directory, that should be no problem.
It seems the python license, PSF, is pretty open:
http://www.python.org/psf/license/. We can distribute it and everything in binary form and there is no copy-left. Perhaps we could static-link it into boost. I think the python modules are stored in .pyd files, but perhaps we could compile some of the core ones in. Btw, I would really like to be able to modify a script while the engine is running and have it recompile

Right now, the main loop is a bit of a mess, I was experimenting with turning the loop into a "tasklet" and it seemed to work quite well. It just needs some integration with WGEManager, aswell as some scheduling code for tasklets. I found some really good resources on that from an eve online presentation and some opensource X-Com project, I'll post those soon. Basically, the loop in C++ pretends to be a tasklet by casting the function pointer to a PyObject*.
I agree with the codec abstraction too, but how do you feel about the SoundSystem abstraction? Would you want to just try OpenAlSoft and integrate PortAudio with it?, Or maybe a ASIO backend? I'm not quite sure how those two are tied together yet.
I'm really glad it compiled for ya.

I was a bit worried about the build process, since I had done most of it on Linux, but it doesn't seem too bad. I'll be sure to fix up the install documentation with some of suggestions you had.