I have a standard Apache2 installation on an Ubuntu server. The default settings use ScriptAlias to refer /cgi-bin/ to /usr/lib/cgi-bin/. If I place my Python CGI script in /usr/lib/cgi-bin/ it executes.
I created /var/www/cgi-bin/ with appropriate permissions, removed the ScriptAlias line, changed the Directory entry in the default file for the site, moved the CGI file to /var/www/cgi-bin/ and restarted Apache2, but I was not able to get the script to run. It was appearing as a text file in the browser instead of being executed. The HTML file calling the script refers to /cgi-bin/SCRIPT, so I left that unchanged. I tried variations on /cgi-bin and /var/www/cgi-bin in the config files without success. How can I get a Python CGI file to run from /var/www/cgi-bin?
please make sure:

the file you are calling itself has enough permission
the file you are calling has an extension that is is in the .htaccess file (see newtover's answer)
specify how you want to run the script in the first line of the file. If you are calling foo.pl, make sure #!/usr/bin/perl is in the first line.
Execute Python CGI from /cgi-bin/ folder