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I think I've found a bug in python's list comprehension parser. Observe:
>>> [e for i in j in ['a','b','c']]
Traceback (most recent call last):
 File "<stdin>", line 1, in <module>
NameError: name 'j' is not defined
Now, according to the grammar at http://docs.python.org/ref/lists.html,
a list comprehension is (condensed for clarity):
list_comprehension 	::= 	expression list_for
list_for 	::= 	"for" target_list "in" old_expression_list [list_for]
So a list comprehension should always be 
[.... for ... in .... for ... in ... for ... in ...]
(that is, alternating 'for's and 'in's) but here I have a test case that
python happily tries to run that looks like
[... for ... in ... in ....]

Your example is parsed as [e for i in (j in ['a','b','c'])] and since
`j` is not defined, you get a NameError. If it was defined, you would
still be iterating a boolean (which is not defined).
Grammatically, this is the following (just the important parts, again):
list_comprehension ::= expression list_for
list_for ::= "for" target_list "in" old_expression_list
old_expression_list ::= old_expression
old_expression ::= <stripped test hierarchy...> comparison
comparison ::= or_expr ( comp_operator or_expr )*
comp_operator ::= "in"
So your basic misconception is that both `in` keywords are belonging to
the list comprehension syntax -- the former does while the latter is
simply an operator.

Indeed; your sample is equivalent to:
temp = (j in ['a','b','c']) # the "contains" operator
[e for i in temp] # basic list comprehension
Even if not meaningful, this code is syntactically correct.

Oh, okay. That's really confusing because I expect "in" to always return
a bool, but in the spirit of python there's no reason it should I guess.