I would use a full web hosted IDE, that way everyone can just click and they have a usable dev environment running. The mechanics of programming are orthogonal and often much harder than programming itself. Skip the dev env setup and go directly to solving problem.

Next, they need to understand WHY they are solving problems. Teach them high level concepts and then low level implementation.

Induction, recursion, depth first, breadth first traversal. The New Turing Omnibus is a great place to start for algorithms plus applications. Python is OK, but I think too mutable. Scheme is way more powerful, maybe something like a cross between Scheme and Python, OCaml Lite in the browser?