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os.path.isfile doesn't reckognize a .picasa.ini file as a file
and os.path.isdir doesn't reckognize a directory as a directory
code:
def traverse (targetDir):
 currentDir = targetDir
 dirs = os.listdir(targetDir)
# dirs = [x for x in os.listdir('.') if x.endswith('.JPG')]
 for entry in dirs:
 if os.path.isdir(entry):
 print("Traversing " + entry)
 traverse(entry)
 else:
 print("Not dir: " + entry)
 if os.path.isfile(entry):
 print("Processing " + " " + currentDir + " " + entry)
 else:
 print("Not file: " + entry)
 print("\n")
 return True
The test directory contains jpg files and a folder with some other jpgs and a subfolder containing jpgs

I think your problem is a different one: os.listdir() doesn't return full paths and os.path.isfile()/isdir() return False if the supplied path doesn't exist.
For example if you have this directory structure:
foo/
foo/bar/
foo/bar/baz
Calling os.listdir('foo') will return ["bar"]. Calling os.isdir('bar') will return False because it can't find the file.
Have a look at os.walk() which was written with your use case in mind.

You're right, my code was shite. Strange though it seemed to work on some files. The following updated version does everything as intended with the help of os.path.join:
def traverse (targetDir):
 currentDir = targetDir
 dirs = os.listdir(targetDir)
 for entry in dirs:
 if os.path.isdir(os.path.join(currentDir,entry)):
 print("Traversing " + os.path.join(targetDir,entry))
 traverse(os.path.join(targetDir,entry))
 else:
 if os.path.isfile(os.path.join(targetDir,entry)):
 print("Processing" + " " + os.path.join(currentDir,entry))
 else:
 print("Not file: " + entry)
 print("\n")