I had a surprising amount of trouble last night getting cx_Oracle working with Oracle XE on a clean Kubuntu machine. It turns out that cx_Oracle's setup.py can't recognize a version number for XE. I eventually figured it out, made a patch, and blogged it at http://catherinedevlin.blogspot.com/2007/10/cxoracle-and-oracle-xe-on-ubuntu.html
Check that if you're getting error messages like "error in cx_Oracle setup command: Oracle home does not refer to an 8i, 9i, 10g or 11g installation"
Just thought I'd post here, in hopes that the gods of Search will lead lost travelers to safety.
just a suggestion but maybe you should let Anthony T. know about it so he can fix the official cx_Oracle setup.py. The Cx_Oracle mailing list (http://sourceforge.net/mail/?group_id=84168) has low traffic and it's an excellent place to talk to Anthony.