If you need PIL in your custom Python 2.6 build (your build needs to be custom if you want to target LTS Ubuntu Server's default Python while working on a more recent Ubuntu), you will likely find your PIL build doesn't work (because, of course, you have a 64-bit build of Ubuntu and the libraries are in a different place...). To fix it, here's the patch:

*** setup.py    2009-11-15 11:06:10.000000000 -0500
--- setup-fixed.py      2012-03-09 17:19:38.000000000 -0500
***************
*** 148,153 ****
--- 148,154 ----
              add_directory(include_dirs, "/opt/local/include")
  
          add_directory(library_dirs, "/usr/local/lib")
+         add_directory(library_dirs, "/usr/lib/x86_64-linux-gnu")
          # FIXME: check /opt/stuff directories here?
  
          prefix = sysconfig.get_config_var("prefix")

After that, 1.1.7 builds with the standard "python2.6 setup.py install" (with the build requirements installed).

But what *I* wound up doing, (once I'd fixed it, and written this blog post) was remember that Pillow exists... and just did pip install pillow instead.