Recommended Django setup?
Ubuntu is far and away a better platform nowadays.  I'm a refugee from RHEL and Fedora.  Get Ubuntu 9.10, and if you'd like, spawn it on Amazon ec2 for total flexibility (i.e. launch it in about 90 seconds, play around, do what you want, delete it, and only pay a buck).  Otherwise, just use Ubuntu on the desktop.
Ubuntu has Python 2.6 by default so you don't have to go out and find weird upgrade paths.  Also Ubuntu has ready-to-go installations for django 1.1.1 (the latest and greatest) that integrate with Apache, etc...
In other words, with zero usage of PIP, easy_install or source installations, you can get running with Django on Ubuntu/Apache.
Once you're comfortable, PIP is the tool you should use for all non-stock python library installations as it's more up to date.
MySQL is easier than Postgres but it doesn't really matter either way.  
=== edit ====
I forgot to add that I use mod_wsgi.  I forgot all about it since the Ubuntu Apache installation was so easy that I hardly had to even think about it.
I am about to embark a major django project. If I install the latest stable release... is the a suggested setup ie. this OS, this RDBMS, this version of python etc?? I'm normally a CentOS man but their repos don't play too well with the django requirements...