I highly recommend xlrd for reading
voyager mentioned the use of COM automation. Having done this myself a few years ago, be warned that doing this is a real PITA. The number of caveats is huge and the documentation is lacking and annoying. I ran into many weird bugs and gotchas, some of which took many hours to figure out.
UPDATE: For newer
.xlsx files, the recommended library for reading and writing appears to be openpyxl (thanks, Ikar Pohorský).