diff --git a/.gitignore b/.gitignore
index ae152ff7..d5cddf02 100644
--- a/.gitignore
+++ b/.gitignore
@@ -4,6 +4,7 @@
 *~
 Makefile
 Makefile.in
+*.deps
 
 # Absolute
 
@@ -19,7 +20,6 @@ missing
 py-compile
 stamp-h1
 dbus-installed.conf
-
 intltool-extract
 intltool-extract.in
 intltool-merge
@@ -35,4 +35,10 @@ po/*.gmo
 sugar/__installed__.py
 tools/sugar-setup-activity
 shell/PresenceService/org.laptop.Presence.service
-threadframe/build
+threadframe
+config.guess
+config.sub
+depcomp
+libtool
+ltmain.sh
+po/ChangeLog
diff --git a/Makefile.am b/Makefile.am
index 5d9791fa..902e2b38 100644
--- a/Makefile.am
+++ b/Makefile.am
@@ -1,7 +1,24 @@
-SUBDIRS = activities shell sugar tools threadframe
+SUBDIRS = activities po shell sugar tools threadframe
 
 dbusconfdir = $(pkgdatadir)
 dbusconf_DATA = dbus-installed.conf
 
 install-data-local:
-	sugar/setup.py $(top_srcdir)/activities $(pkgdatadir)/activities $(bindir)/sugar-activity-factory
+	$(top_srcdir)/sugar/setup.py \
+		$(top_srcdir)/activities \
+		$(DESTDIR)$(pkgdatadir)/activities \
+		$(bindir)/sugar-activity-factory
+
+uninstall-local:
+	rm -rf $(DESTDIR)$(pkgdatadir)/activities/*.activity
+	rm -rf $(DESTDIR)$(pkgdatadir)/activities/*.service
+
+DISTCLEANFILES =		\
+	intltool-extract	\
+	intltool-merge		\
+	intltool-update
+
+EXTRA_DIST =                    \
+	intltool-merge.in       \
+	intltool-update.in      \
+	intltool-extract.in
diff --git a/configure.ac b/configure.ac
index ab66e07c..3bf52007 100644
--- a/configure.ac
+++ b/configure.ac
@@ -1,7 +1,8 @@
-AC_INIT([Sugar],[0.18],[],[sugar])
+AC_INIT([Sugar],[0.19],[],[sugar])
 
 AC_PREREQ([2.59])
 
+AC_CONFIG_MACRO_DIR([m4])
 AC_CONFIG_HEADERS([config.h])
 AC_CONFIG_SRCDIR([configure.ac])
 
@@ -9,7 +10,11 @@ AM_INIT_AUTOMAKE([1.9 foreign dist-bzip2 no-dist-gzip])
 
 AM_MAINTAINER_MODE
 
+AC_DISABLE_STATIC
+AC_PROG_LIBTOOL
+
 AM_PATH_PYTHON
+AM_CHECK_PYTHON_HEADERS(,[AC_MSG_ERROR(could not find Python headers)])
 
 #
 # Setup GETTEXT
diff --git a/m4/python.m4 b/m4/python.m4
new file mode 100644
index 00000000..e1c5266d
--- /dev/null
+++ b/m4/python.m4
@@ -0,0 +1,62 @@
+## this one is commonly used with AM_PATH_PYTHONDIR ...
+dnl AM_CHECK_PYMOD(MODNAME [,SYMBOL [,ACTION-IF-FOUND [,ACTION-IF-NOT-FOUND]]])
+dnl Check if a module containing a given symbol is visible to python.
+AC_DEFUN([AM_CHECK_PYMOD],
+[AC_REQUIRE([AM_PATH_PYTHON])
+py_mod_var=`echo $1['_']$2 | sed 'y%./+-%__p_%'`
+AC_MSG_CHECKING(for ifelse([$2],[],,[$2 in ])python module $1)
+AC_CACHE_VAL(py_cv_mod_$py_mod_var, [
+ifelse([$2],[], [prog="
+import sys
+try:
+        import $1
+except ImportError:
+        sys.exit(1)
+except:
+        sys.exit(0)
+sys.exit(0)"], [prog="
+import $1
+$1.$2"])
+if $PYTHON -c "$prog" 1>&AC_FD_CC 2>&AC_FD_CC
+  then
+    eval "py_cv_mod_$py_mod_var=yes"
+  else
+    eval "py_cv_mod_$py_mod_var=no"
+  fi
+])
+py_val=`eval "echo \`echo '$py_cv_mod_'$py_mod_var\`"`
+if test "x$py_val" != xno; then
+  AC_MSG_RESULT(yes)
+  ifelse([$3], [],, [$3
+])dnl
+else
+  AC_MSG_RESULT(no)
+  ifelse([$4], [],, [$4
+])dnl
+fi
+])
+
+dnl a macro to check for ability to create python extensions
+dnl  AM_CHECK_PYTHON_HEADERS([ACTION-IF-POSSIBLE], [ACTION-IF-NOT-POSSIBLE])
+dnl function also defines PYTHON_INCLUDES
+AC_DEFUN([AM_CHECK_PYTHON_HEADERS],
+[AC_REQUIRE([AM_PATH_PYTHON])
+AC_MSG_CHECKING(for headers required to compile python extensions)
+dnl deduce PYTHON_INCLUDES
+py_prefix=`$PYTHON -c "import sys; print sys.prefix"`
+py_exec_prefix=`$PYTHON -c "import sys; print sys.exec_prefix"`
+PYTHON_INCLUDES="-I${py_prefix}/include/python${PYTHON_VERSION}"
+if test "$py_prefix" != "$py_exec_prefix"; then
+  PYTHON_INCLUDES="$PYTHON_INCLUDES -I${py_exec_prefix}/include/python${PYTHON_VERSION}"
+fi
+AC_SUBST(PYTHON_INCLUDES)
+dnl check if the headers exist:
+save_CPPFLAGS="$CPPFLAGS"
+CPPFLAGS="$CPPFLAGS $PYTHON_INCLUDES"
+AC_TRY_CPP([#include <Python.h>],dnl
+[AC_MSG_RESULT(found)
+$1],dnl
+[AC_MSG_RESULT(not found)
+$2])
+CPPFLAGS="$save_CPPFLAGS"
+])
diff --git a/po/POTFILES.in b/po/POTFILES.in
index 249b86f0..ff93532d 100644
--- a/po/POTFILES.in
+++ b/po/POTFILES.in
@@ -1,5 +1,5 @@
-shell/PresenceWindow.py
-shell/StartPage.py
 activities/browser/NavigationToolbar.py
-shell/shell.py
 sugar/chat/ChatEditor.py
+activities/chat/ChatActivity.py
+activities/groupchat/GroupChatActivity.py
+shell/PresenceView.py
diff --git a/shell/Makefile.am b/shell/Makefile.am
index 61483ae8..dbaefdd9 100644
--- a/shell/Makefile.am
+++ b/shell/Makefile.am
@@ -21,4 +21,4 @@ sugar_PYTHON =				\
 	PresenceView.py			\
 	Shell.py
 
-EXTRA_DIST = sugar
+EXTRA_DIST = $(bin_SCRIPTS)
diff --git a/shell/PresenceService/Makefile.am b/shell/PresenceService/Makefile.am
index b80f2245..1710d540 100644
--- a/shell/PresenceService/Makefile.am
+++ b/shell/PresenceService/Makefile.am
@@ -12,3 +12,7 @@ sugar_PYTHON =				\
 	Buddy.py			\
 	PresenceService.py		\
 	Service.py
+
+DISTCLEANFILES = $(service_DATA)
+
+EXTRA_DIST = $(service_in_files)
diff --git a/threadframe/Makefile.am b/threadframe/Makefile.am
index e2cbd43e..01ce6b1e 100644
--- a/threadframe/Makefile.am
+++ b/threadframe/Makefile.am
@@ -1,13 +1,6 @@
-all:
-	python setup.py build
+INCLUDES = $(PYTHON_INCLUDES)
 
-install:
-	python setup.py install --prefix=${prefix}
-
-uninstall:
-	rm -f ${prefix}/lib/python2.4/site-packages/threadframe.so
-
-clean:
-	python setup.py clean
-	-rm -rf build
-	-rm -f core *~ *.so *.o *.pyd *.a python*.def
+threadframedir = $(pyexecdir)
+threadframe_la_LDFLAGS = -module -avoid-version
+threadframe_LTLIBRARIES = threadframe.la
+threadframe_la_SOURCES = threadframemodule.c