There are some fundamental things you need to understand about running Panda and Python. If you misunderstand these points initially, you will just cause yourself heartache.
(1) Panda is a compiled C++ Python module. This means it is compiled specifically for one particular version of Python and it will only run on that particular version of Python. (You can make it run with a different version if you need to, but that means you will need to get Panda from source and compile it yourself, which is not recommended if you’re not already familiar with building large C++ programs.)
This is why Panda ships with its own version of Python, to reduce confusion. You (probably) can’t install a different version on top of this one. It is likely to cause problems if you do. You have to use the version of Python that came with Panda. (All right, you don’t have to, but that’s the place to start. If you want to use a different Python, you should be prepared for a bit of trouble.)
(2) Don’t put panda.pth in your python directory, unless you know what you are doing. This is going to cause you heartache if you mix-and-match Python versions, because it won’t work. It will give you errors about not being able to find libpandaexpress.dll. But see below.
(3) The difference between “python” and “ppython” is that “python” is whatever version of Python you happen to have on your PATH. It might be Panda’s version, or it might be any other Python you have installed. “ppython” is a special program to find Panda’s version of Python specifically. Out of the box, “ppython” is supposed to work. If it doesn’t, something went wrong when you installed Panda.
(4) Once you have “ppython” working, then you can talk about getting a different installation of Python working with Panda. To do this, you have to first make sure that it is the same version of Python as the one that Panda uses. That is, if you type “ppython” it will say “Python 2.6.2” or whatever. Make sure that when you run this other version of Python, it also says “Python 2.6.2”. (Actually, the third number doesn’t matter as much, but the first two certainly do. It must be exactly Python 2.6.x, no other version of Python will work. Python 2.5.x won’t work; Python 2.7.x won’t work.) Once you have made sure that the versions match, then you can (a) put panda.pth in the python directory, and (b) if it’s not already there, add the c:\Panda3D-1.7.2\bin directory to your PATH.