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os.popen() doesn't work when the CWD is a UNC path like \\hostname\dirname\....
The call to os.popen() will appear to succeed, but subsequent calls to read/write the returned pipe will result in an IOError: invalid parameter exception.
This failure is not specific to py2exe as it will happen anytime os.popen() is used with a current working directory (CWD) that is a UNC path such as \\hostname\dirname\... rather than a DOS style path such as G:dirname. While this isn't specific to py2exe, the problem is rarely encountered unless a program has been distributed using something like py2exe and is being executed by clicking on a file or shortcut to which the user has browsed on the network.
The underlying problem is due to a "feature" in cmd.exe documented at http://support.microsoft.com/kb/156276/EN-US/
The solution is to use subprocess.Popen() with shell=False (which won't use cmd.exe) instead of os.popen() (which does use cmd.exe). However, subprocess.Popen() has its own Windows-related bug which requires working around. See the subprocess documentation at http://docs.python.org/dev/lib/module-subprocess.html for general usage and Py2ExeSubprocessInteractions page for examples on working around subprocess.Popen bugs that show up when using py2exe.