What to do when pypi goes down

Indeed - relying on someone else's infrastructure for production installs is always a risky business. Even once PyPI's infrastructure gets better (there'll soon be multiple mirrors, automatic fallover, etc.), it's probably still going to be a good idea to run a local mirror.

There's a pretty easy way to do that these days: pep381client: http://pypi.python.org/pypi/pep381client. This'll create a directory structure that you can serve from any web server and will act enough like PyPI to serve as a local mirror. Then you can point to your mirror and know it'll be there when you need it. You'll need about 15GB of disk space to mirror all the files from PyPI.