My SUT looks like:
foo.py bar.py tests/__init__.py [empty] tests/foo_tests.py tests/bar_tests.py tests/integration/__init__.py [empty] tests/integration/foo_test
For anyone trying to do this with setup.cfg, the following works. I had some trouble figuring out how to specify multiple packages.
[nosetests] with-coverage=1 cover-html=1 cover-package=module1,module2