error creating virtualenv in existing folder
Question: 
    $ virtualenv virtenv
    Overwriting virtenv/lib/python2.7/site.py with new content
    New python executable in virtenv/bin/python
    Overwriting virtenv/lib/python2.7/distutils/__init__.py with new content
    Installing setuptools, pip...
      Complete output from command /virtenv/bin/python -c "import sys, pip; sys...d\"] + sys.argv[1:]))" setuptools pip:
      Exception in thread Thread-2:
    Traceback (most recent call last):
      File "/usr/lib/python2.7/threading.py", line 810, in __bootstrap_inner
        self.run()
      File "/usr/lib/python2.7/threading.py", line 763, in run
        self.__target(*self.__args, **self.__kwargs)
      File "/virtenv/local/lib/python2.7/site-packages/pip-1.1-py2.7.egg/pip/index.py", line 245, in _get_queued_page
        page = self._get_page(location, req)
      File "/virtenv/local/lib/python2.7/site-packages/pip-1.1-py2.7.egg/pip/index.py", line 335, in _get_page
        return HTMLPage.get_page(link, req, cache=self.cache)
      File "/virtenv/local/lib/python2.7/site-packages/pip-1.1-py2.7.egg/pip/index.py", line 452, in get_page
        resp = urlopen(url)
      File "/virtenv/local/lib/python2.7/site-packages/pip-1.1-py2.7.egg/pip/download.py", line 85, in __call__
        response = urllib2.urlopen(self.get_request(url))
      File "/usr/lib/python2.7/urllib2.py", line 127, in urlopen
        return _opener.open(url, data, timeout)
      File "/usr/lib/python2.7/urllib2.py", line 396, in open
        protocol = req.get_type()
      File "/usr/lib/python2.7/urllib2.py", line 258, in get_type
        raise ValueError, "unknown url type: %s" % self.__original
    ValueError: unknown url type: /usr/lib/python2.7/dist-packages
    
    Exception in thread Thread-3:
    Traceback (most recent call last):
      File "/usr/lib/python2.7/threading.py", line 810, in __bootstrap_inner
        self.run()
      File "/usr/lib/python2.7/threading.py", line 763, in run
        self.__target(*self.__args, **self.__kwargs)
      File "/virtenv/local/lib/python2.7/site-packages/pip-1.1-py2.7.egg/pip/index.py", line 245, in _get_queued_page
        page = self._get_page(location, req)
      File "/virtenv/local/lib/python2.7/site-packages/pip-1.1-py2.7.egg/pip/index.py", line 335, in _get_page
        return HTMLPage.get_page(link, req, cache=self.cache)
      File "/virtenv/local/lib/python2.7/site-packages/pip-1.1-py2.7.egg/pip/index.py", line 452, in get_page
        resp = urlopen(url)
      File "/virtenv/local/lib/python2.7/site-packages/pip-1.1-py2.7.egg/pip/download.py", line 85, in __call__
        response = urllib2.urlopen(self.get_request(url))
      File "/usr/lib/python2.7/urllib2.py", line 127, in urlopen
        return _opener.open(url, data, timeout)
      File "/usr/lib/python2.7/urllib2.py", line 396, in open
        protocol = req.get_type()
      File "/usr/lib/python2.7/urllib2.py", line 258, in get_type
        raise ValueError, "unknown url type: %s" % self.__original
    ValueError: unknown url type: /usr/share/python-virtualenv/
    
    Exception in thread Thread-1:
    Traceback (most recent call last):
      File "/usr/lib/python2.7/threading.py", line 810, in __bootstrap_inner
        self.run()
      File "/usr/lib/python2.7/threading.py", line 763, in run
        self.__target(*self.__args, **self.__kwargs)
      File "/virtenv/local/lib/python2.7/site-packages/pip-1.1-py2.7.egg/pip/index.py", line 245, in _get_queued_page
        page = self._get_page(location, req)
      File "/virtenv/local/lib/python2.7/site-packages/pip-1.1-py2.7.egg/pip/index.py", line 335, in _get_page
        return HTMLPage.get_page(link, req, cache=self.cache)
      File "/virtenv/local/lib/python2.7/site-packages/pip-1.1-py2.7.egg/pip/index.py", line 452, in get_page
        resp = urlopen(url)
      File "/virtenv/local/lib/python2.7/site-packages/pip-1.1-py2.7.egg/pip/download.py", line 85, in __call__
        response = urllib2.urlopen(self.get_request(url))
      File "/usr/lib/python2.7/urllib2.py", line 127, in urlopen
        return _opener.open(url, data, timeout)
      File "/usr/lib/python2.7/urllib2.py", line 396, in open
        protocol = req.get_type()
      File "/usr/lib/python2.7/urllib2.py", line 258, in get_type
        raise ValueError, "unknown url type: %s" % self.__original
    ValueError: unknown url type: .
    
    Ignoring indexes: http://pypi.python.org/simple/
    Downloading/unpacking distribute
      Could not find any downloads that satisfy the requirement distribute
    No distributions at all found for distribute
    Storing complete log in /home/collin/.pip/pip.log
    ----------------------------------------
    ...Installing setuptools, pip...done.
    Traceback (most recent call last):
      File "/usr/bin/virtualenv", line 3, in <module>
        virtualenv.main()
      File "/usr/lib/python2.7/dist-packages/virtualenv.py", line 825, in main
        symlink=options.symlink)
      File "/usr/lib/python2.7/dist-packages/virtualenv.py", line 993, in create_environment
        install_wheel(to_install, py_executable, search_dirs)
      File "/usr/lib/python2.7/dist-packages/virtualenv.py", line 961, in install_wheel
        'PIP_NO_INDEX': '1'
      File "/usr/lib/python2.7/dist-packages/virtualenv.py", line 903, in call_subprocess
        % (cmd_desc, proc.returncode))
    OSError: Command /virtenv/bin/python -c "import sys, pip; sys...d\"] + sys.argv[1:]))" setuptools pip failed with error code 1
    


Answer: The version of pip in the existing virtualenv is outdated (version 1.1).
upgrade it first:

    
    
    ./virtenv/bin/pip install --upgrade pip
    

or just delete it:

    
    
    rm ./virtenv/bin/pip*
    rm -r ./virtenv/lib/python*/site-packages/pip*
    

