Python's requirement of indentation is somewhat limiting in terms of what the language can do. For instance, that's partly the reason why Python doesn't allow more than a single expression in a lambda.

It doesn't? Is there some kind of documentation about it we can look at?

Try: http://docs.python.org/dev/3.0/glossary.html#term-lambda

Sounds good that you are going to give significant indentation a try.

I like to have the flexibility to indent in whatever style the code calls for. That said, looking over the Python docs again, their implementation of significant whitespace is a lot more flexible than I remembered. I didn't realize you could do one-line method definitions, and that the whitespace only kicks in when you write a multi-line block.

Here's a question for you. In Python, if you have a couple of nested lambdas with multiline bodies, getting passed into each other as arguments, do you have to write the closing parenthesis on the correctly-indented line on the other side, or can it be tucked against the inner lambda?

In a hypothetical significant-whitespace CoffeeScript, I'm thinking of this:

    elements.each(el =>
      el.click(event =>
        el.show()))

Versus this:

    elements.each(el =>
      el.click(event =>
        el.show()
      )
    )

Is the second form required to make Python-style whitespace work?

Python does not have multiline lambdas. But Python only uses significant whitespace when it can't use other demarcations. For example, the following is legal:

  a = [
        1,
          2,
            3]

No.

Great. Then let's start a "whitespace" branch, and give it a go.

Edit: Alright, got a branch that starts with a little significant whitespace going here:

http://github.com/jashkenas/coffee-script/tree/whitespace

It can't handle the first of the two cases mentioned above just yet, but it compiles the second one correctly.