not using dist-upgrade would defeat the purpose of using a linux-based phone, there's a lot of apps that don't show up in the default app manager.

after some digging I've come across this article:
http://bit.ly/evi9bO
I followed the steps and...

I wouldn't recomend uninstalling pymaemo-optify as the article suggests as it will uninstall any applications that depend on python.

I also found that a lot of core apps wanted to uninstall when I tried to do a dist-upgrade after installing the newer pymaemo-optify (ie pulseaudio, hildon-theme, libqt etc, etc, to the tune of 496 packages on my device)

so, it looks like the only way to resolve the issue is to backup your settings and flash your n900.

edit: oh, and after installing a single python app (mediabox in this case) i'm back to square one with dist-upgrade complaining about python2.5-minimal. will flash the damn thing when I get home.