About http://www.pycontest.net... here's how it's done.
Sadly, it's pretty much impossible to put the code on the web because it has some really non-ascii stuff in it ;-)
Here's the key tricks (thanks to Remi and the others):
One of the key tricks is writing a short version of a very long octal number (or three).
I tried using base36 and int('gobledygook',36).
You could use 0xhexacodehere.
But here's the most space-efficient one: use base 256!
For each byte you want, create a char using chr(byte). Then paste them all together. Then put it in your code as a string. If you are lucky you will have no quotes or newlines in it, and the python interpreter will eat it.
You can later get the byte number x using ord('h!alsdf'[x]), and each byte by some dividing and modulo operation.
Another important piece is encoding 7 3-character strings as compactly as possible, and splitting them by offsets (which are encoded in the previosuly mentioned big number in base 8 ;-)
One extra squeeze is finding the shortest way to concatenate strings.
It's ''.join(), but if you are using it twice (or more), you save space by doing j=''.join and using j later.
Last one: Instead of defining a function, do a lambda:
def seven_seg(x): return .....
6 chars less!
And here is the shortest code I got so far (121 characters, requires python 2.4. On 2.2, it has to be 124).
In the contest, some guys are at 120. I don't know how. I can't even guess how ;-)
Update: it turns out I did know how to do it check it out I think it's the first public 120 :-)
BTW: you can't write that using kwrite. Vim works, though.