I have the same issue with this:
Ubuntu 11.04 64 bit
virtualenv (I've tried with both sphinx system package v1.0.7 and one installed in virtenv 1.1.2).
I've chased it down and I think its a bit and it seems to be in the method _parse_command_line in the Ubuntu distro of python 2.7 (/usr/lib/python2.7/distutils/dist.py). I've attached my conf.py for reference and my module tree looks like the following
/home/user/test <--- base directory full of python modules
/home/user/doc/ <--- where sphinx makefile is being run
$ make html
sphinx-build -b html . _build/html
Running Sphinx v1.1.2
loading pickled environment... done
building [html]: targets for 6 source files that are out of date
updating environment: [extensions changed] 6 added, 0 changed, 0 removed
usage: sphinx-build [global_opts] cmd1 [cmd1_opts] [cmd2 [cmd2_opts] ...]
or: sphinx-build --help [cmd1 cmd2 ...]
or: sphinx-build --help-commands
or: sphinx-build cmd --help
error: option -b not recognized
Also:
$ sphinx-build . _build/html/
Running Sphinx v1.1.2
loading pickled environment... done
No builder selected, using default: html
building [html]: targets for 6 source files that are out of date
updating environment: [extensions changed] 6 added, 0 changed, 0 removed
invalid command name '.'] <one of my module names>
Any thoughts you have would be awesome.