I am, using Ubuntu 12.04 server which by default has two versions of Python: 2.7 and 3.2. When I install PIL using the python setup.py install terminal command,
python setup.py install
Your instructions are too long and not entirely scripted, these are better (same platform — recent Debian/Ubuntu):
sudo aptitude install python3-pip git pip-3.2 install --user git+https://github.com/python-imaging/Pillow