As you can see from the documentation, it is mainly meant for running Python based applications on ms-windows and for embedding Python in an application. As you can see, they left out tkinter. Maybe to keep the size down?
Comparing it to a virtualenv doesn’t make much sense, I think. They have completely different use cases.
In the ms-windows world, applications are generally distributed as monolithic independant entities. In contrast, basically every UNIX flavor has a working package management system which makes it easier to have packages that depend on others. So if you install a python-based app in UNIX, the package management system will basically install Python for you if it isn’t installed yet. On ms-windows this doesn’t work. Several Python distributions for ms-windows have sprung up because (for technical reasons) compiling and setting up stuff on ms-windows is painful [1] compared to UNIX. So having an embeddable Python could make sense for people who want to distribute Python-based programs or who want to embed Python into their application.
In general though I recommend that ms-windows users install either Canopy or Anaconda because they come with most of the external modules that you’ll be likely to need.
Edit As of 2020, the python.org distribution has come a long way; you don’t need a special compiler for it anymore, and more and more modules distribute precompiled binaries for ms-windows on PyPI. So my recommendation for ms-windows users has changed: use the python.org releases of Python.