Using distutils in Windows XP / "Python in a Nutshell"

[Blair LeGent]

Following the directions in "Python in a Nutshell" (an excellent book), 
I entered the C code for "helloworld.c", saved it as a file, and entered 
this script and saved it as setup.py:

from distutils.core import setup, Extension
setup(name='helloworld', ext_modules= [ 
Extension('helloworld',sources=['helloworld.c'])])

Then, following directions, I type "python setup.py install" from a C:\> 
prompt.  I get these messages:

running install
running build
running build_ext
error: The .NET Framework SDK needs to be installed before building 
extensions for Python.

...but the .NET Framework IS installed; the latest version, in fact, SDK 
v2.0, part of the Visual Studio 2005 beta I've got.  From poking around 
the Internet it looks like I'm supposed to (a) monkey with my registry, 
(b) install an OLD version of the SDK, (c) screw around with distutils 
source code, or (d) switch to Linux.  Nowhere do I find a clear solution 
to my problem, though.  Can anyone help?  Should we submit an errata to 
O'Reilly?