It is not possible to install python on OpenWrt Kamikaze 7.09 because it depends on libreadline which is not available in the repositories for now.
There is a simple workaround:

  • Install the libreadline from 7.06 (brcm47xx-2.6 for mipsel and atheros-2.6 for mips)
   # ipkg install http://downloads.openwrt.org/kamikaze/7.06/brcm47xx-2.6/packages/libreadline_5.1-1_mipsel.ipk
  • Install python
   # ipkg install python

I tested this on the au1000 7.09 build. It should work on other mipsel and mips builds and on 7.07.