Löve 0.7.1 (lua game framework) is released
love2d.org
love2d.org
Having said that, this looks very interesting and I'll definitely keep an eye out for it in future.
I have been working, since September, on my senior project in Pygame. It isn't fun to work in. The documentation is great, but the community seems dead. Things are not easy in Pygame. Distribution is especially painful, with py2exe and py2app and setuptools. I've had a lot of trouble getting certain sounds to play. I would not recommend it.
Really, go with LOVE2D or Flixel or even Flash if you want to make games in a high level language. Not only that, but if you want to have _fun_ making a game, and not get bogged down in low-level details.
I would not recommend Pygame.
I am always amazed at the speed of LuaJIT, at least in these benchmarks:
http://shootout.alioth.debian.org/u32/code-used-time-used-sh...
It holds its own against scala and java -server with only a fraction of the code size (but only on 32 bit machines).
http://love2d.org/forums/viewtopic.php?f=4&t=2409
Seems to be somehow possible to get it working. It is not officially supported, though. I guess as luajit matures there is a decent possibility that it will be a supported option since games (even 2d) would benefit from the increased speed. OTOH portability of love2d would probably be decreased, too.
btw, How are you deploying your lua apps?
http://love2d.org/wiki/Game_Distribution
Also, py2exe is reliable and not that difficult to set up, but py2app is a bit of a pain. The resultant .app directories are also pretty big. My game is 6.5mb in Windows, and 32mb in OS X.
You can view what my 5-person team created on GitHub: https://github.com/icco/RainbowDeathSwarm . It's rather horrid, but I suppose it's decent considering our lack of knowledge of either the language or making games.