Rewrite setup.py and associated logic to fix multiple build problems.

The recent distcheck revealed that paths were set incorrectly for the setup.py
script.  Also, as I dug deeper, it turned out that built files were placed in
the src directory (thanks to os.path.join I found in the distutil's source code,
that trips up the location if relative paths contains too many '..'s.).  [The
distccheck revealed this!]  I didn't like either that setup was run in the
source directory and not from the build directory (that's asking for trouble).
I did't like either that the search path, the list of includes, in setup.py was
handcoded and not simply that of CPPFLAGS.  Finally, I was confused by _builddir
being another build directory under $(buildir).  I renamed the former
_include_server to better explain its role.

So, I rewrote most of setup.py (correcting some of the documentation strings
along the way). Also, I partly removed the 'jumping through the hoops'
gymnastics from the Makefile.

TESTING: 'make distcheck'
REVIEWERS: csilvers, fergus

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