I am a bit confused. There seem to be two different kind of Python packages, source distributions (setup.py sdist) and egg distributions (setup.py bdist_egg).
Both seem to be just archives with the same data, the python source files. One difference is that pip, the most recommended package manager, is not able to install eggs.
What is the difference between the two and what is 'the' way to do distribute my packages?
(Note, I am not wanting to distribute my packages through PyPI, but I want to use a package manager that fetches my dependencies from PyPI)
setup.py sdist creates a source distribution: it contains setup.py, the source files of your module/script (.py files or .c/.cpp for binary modules), your data files, etc. The result is an archive that can then be used to recompile everything on any platform.
setup.py bdist (and bdist_*) creates a built distribution: it includes .pyc files, .so/.dll/.dylib for binary modules, .exe if using py2exe on Windows, your data files... but no setup.py. The result is an archive that is specific to a platform (for example linux-x86_64) and to a version of Python, and that can be installed simply by extracting it into the root of your filesystem (executables are in /usr/bin (or equivalent), data files in /usr/share, modules in /usr/lib/pythonX.X/site-packages/...). You can even build rpm archives that can be directly installed using your package manager.