While working with multiple python projects many different python packages are required to be installed. Sometimes one package with two different version are required for two different projects. Lets imagine that one project requires version 1 of Package1 and another project requires version 2 of Package1. In this kind of scenario python virtualenv would definitely be a great help. virtualenv is a python package. It basically creates a separate python environment in order to avoid conflicts between two different python environments and libraries.

virtualenv can be downloaded from the link http://pypi.python.org/pypi/virtualenv/1.6.1#downloads

In order to install on windows tools like 7-zip is required to extract .tar.gz files.
Download virtualenv-1.6.1.tar.gz (file available during this tip creation) and extract it.
Find the file virtualenv.py inside vritualenv extracted location.
Open cmd prompt and go to location of virtualenv.py (C:\Documents and Settings\mindfire\Desktop\virtualenv-1.6.1.tar\virtualenv-1.6.1\virtualenv-1.6.1 in my case)
and execute by python command by providing an argument.
The argument is a path where the virtual environment will be created.eg python virtualenv.py E:\sandbox
This command will create a folder sandbox on E: drive. The sandbox will act as virtual environment.