The Dreamhost wiki article on Django helped, but all the steps starting from scratch aren't really documented in one place. Hopefully the list below will help, but since I'm writing it after the fact and I had to go through a couple of iterations to get it right, there are probably some things that aren't 100% right.

1. Read the python article. Set up virtualenv into $HOME/local.
2. If you've already messed around with installing MySQLdb and/or other packages, remove them and start over.
3. Install ez_setup (easy_install) as describe in the article.
4. Install the MySQL egg: easy_install MySQL_python
5. Follow the setup steps in the Django article. Do the "myproject" test using sqlite3. Really. It helped me find a couple of things I was doing wrong with my real (i.e. more complicated) MySQL project.
6. As a deviation from the Django setup instructions, I prefer to use a fork of the Django codebase with some of my own patches. If you're in the same situation, use github. I forked the github "unofficial copy" of the subversion code, added a couple of patches that aren't in the trunk yet and a couple of my own, and cloned a copy into my dreamhost account.