$ mkdir a; touch a/b; python2.3 -c 'import shutil;
shutil.move("a", "a/c")
$ ls -l a
ls: a: no such file or directory

The same problem exists on Windows, as reported by one
"shagshag".

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Here's a patch (with tests) that disallows moving a
directory inside itself altogether. I can't upload patches
to SF, so here's a link to it on my homepage:
http://home.student.uva.nl/johannes.gijsbers/shutil.diff.

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Attached Johannes's patch.

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I applied the attached patch, and got this exception:
>>> shutil.move("a", "a/c")
Traceback (most recent call last):
  File "<stdin>", line 1, in ?
  File "/usr/src/cvs-src/python/dist/src/Lib/shutil.py",
line 168, in move
    if is_destination_in_source(src, dst):
TypeError: is_destination_in_source() takes exactly 3
arguments (2 given)

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Sorry, in my haste made a silly mistake. Removed 'self' from
is_destination_in_source definition and uploaded new patch
to previous location.

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I just checked the link to the diff, Johannes, and the diff says it was 
generated on June 5.  Can you check to see if you did upload the newest 
version to the location?

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Yes, I did upload the newest version. The diff was generated
on  June 7, I just used the right copy of shutil.py this
time (which I had already made on June 5).

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Tweaked the function name and made the test clean up the temp 
directory; checked in as rev. 1.29 for Lib/shutil.py and rev. 1.3 for Lib/
test/test_shutil.py on HEAD.  Checked in on 2.3 as rev. 1.28.10.1 and 
rev. 1.2.8.1.

Thanks, Johannes.