A little late I know.
This week I finished to fix all the failing tests and to implement PEP 328 (Absolute/Relative import).
Now it’s the final step for supporting Python2.5 on PyPy, to port the standard library.
I’m starting with it today and I really hope I can finish it all (including tests and everything else) until the end of next week.
Well, one more time, if anyone want to help me, test your python programs (specially the ones that use python2.5 specific features, like with statement, conditional expressions and new generator stuff) in PyPy-2.5-features (svn co http://codespeak.net/svn/pypy/2.5-features pypy-2.5-features).
How to test? Simple:
$ cd pypy-2.5-features
$ ./bin/py.py your_python_program.py
Be careful and patient, it may take a little bit to things start happening 
Of course you can translate PyPy using the translator if you want. Take a look at PyPy’s website for more information.