The ./configure script will analyze your environment and create custom Makefiles particular to your system. Aside from all the standard autoconf stuff, ./configure does the following:
You can manually specify the location of apxs by using the --with-apxs option, e.g.:
$ ./configure --with-apxs=/usr/local/apache/bin/apxs
It is strongly recommended that you do specify this option.
If the Python installation on your system is not suitable or not the one desired for mod_python, you can specify an alternative location with the --with-python options. This option needs to point to the root directory of the Python source, e.g.:
$ ./configure --with-python=/usr/local/src/Python-2.2.1
Note that the directory specified needs to contain already configured and compiled Python. In other words, you must at least run ./configure and make in this directory.
Also note that while it is possible to point the --with-python to a version of Python different from the one installed in your standard PATH, you will need to have that version of Python installed as well. This is because the path to the Python library, which is retrieved from the python binary is going to point to the place where Python would be ultimately installed, not the source deirectory. (Consider that until Python is installed, the location for third party libraries, site-packages, does not exist). Generally, it's best to try to keep the version of Python that you use for mod_python the same as the one you use everywhere on the system.