$ python setup.py --long-description | rst2html > description.html
This is assuming that you create the long-description in your setup.py by reading the README.txt. My setup.py usually contains something like this:
version = '1.0'
description="Some description about what this does, who might use it etc.",
The "\n\n".join() bit is used to make sure there's enough separation between chapters (from the various files), because otherwise you could remove a line which would result in invalid ReST.