It needed a complete cleanup of site-packages after all. Removing just TG's 1.0b2-egg wasn't sufficient, so something else had gotten borked. Since I had only TG stuff there, wiping site-packages clean of *.egg and reinstalling TG 1.0 completely did the trick. Oh, and a simple upgrade 1.0b2 -> 1.0 worked fine on WinXP.
On MacOS X 10.4 I upgraded from a customized version of TG 1.0b1 using easy_intall without issue. Then I modified the setup.py script for my site, modifying the existing TurboGears>=1.0b1 requirment to TurboGears>=1.0. Done.
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