Summary
I stumbled upon a particularly lucid explanation of Python's significant indentation, by Oliver Fromme of secnetics GmbH.

This is the place where to point your friends when they gripe about Python's "significant whitespace". I could't have said it better myself. There even are details on how it's parsed, for those who are interested.

http://www.secnetix.de/~olli/Python/block_indentation.hawk

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About the Blogger

Guido van Rossum is the creator of Python, one of the major programming languages on and off the web. The Python community refers to him as the BDFL (Benevolent Dictator For Life), a title straight from a Monty Python skit. He moved from the Netherlands to the USA in 1995, where he met his wife. Until July 2003 they lived in the northern Virginia suburbs of Washington, DC with their son Orlijn, who was born in 2001. They then moved to Silicon Valley where Guido now works for Google (spending 50% of his time on Python!).