See:
http://wiki.python.org/moin/Python2orPython3
Quote:
At the time of writing (July 4, 2010), the final 2.7 release is out, with a statement of extended support for this end-of-life release. The 2.x branch will see no new major releases after that. 3.x is under active and continued development, with 3.1 already available and 3.2 due for release around the turn of the year.
3.x is the newest branch of Python and the intended future of the language. Guido van Rossum (the original creator of the Python language) decided to clean up Python 2.x properly, with less regard for backwards compatibility than is the case for new releases in the 2.x range. This allowed several aspects of the core language (such as print and exec being statements, integers using floor division) to be adjusted to be easier for newcomers to learn and to be more consistent with the rest of the language. It also allowed later language features (such as iterators) to be applied to older language features (such as the range builtin which returns a list in 2.x, but an iterator in 3.x).
The What's New in Python 3.0 document provides a good overview of the major language changes and likely sources of incompatibility with existing Python 2.x code.
However, the broader Python ecosystem has amassed a significant amount of quality software over the years. The downside of breaking backwards compatibility in 3.x is that a lot of that software doesn't work on 3.x yet.
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So, yes development of python 2.x has ceased and they are moving forward with only 3.x ... kinda disappointing, I was hoping they wouldn't EOL it this quickly.