In most cases on Windows, using a forward slash for representing paths works flawlessly. In the case of distribute, the EGG_INFO will be missing the contents of package.egg-info if a forward slash is used in the package_dir spec. The egg-info will be written correctly to the package_dir, but it won't be copied to the EGG_INFO dir in the build.
The attached script generates a package and then calls setup with it. Run "setup.py install" on Windows, and it will install the "foo 1.0" package, but the EGG_INFO will be missing (and the foo-cmd entry point will fail). Change the package_dir to 'lib\\python' and it will install correctly.