There's a mantra, "flat is better than nested," that generally discourages an overuse of hierarchy. I'm not sure there's any hard and fast rules as to when you want to create a new module -- for the most part, people just use their discretion to group logically related functionality (classes and functions that pertain to a particular problem domain).
Good thread from the Python mailing list, and a quote by Fredrik Lundh:
even more important is that in Python,
you don't use classes for every-
thing; if you need factories,
singletons, multiple ways to create
objects, polymorphic helpers, etc, you
use plain functions, not classes or
static methods.
once you've gotten over the "it's all
classes", use modules to organize
things in a way that makes sense to
the code that uses your components.
make the import statements look good.
