I think I filed this before, but it may have got lost when github totally reworked their pull request subsystem. Anyway, it looks to me like the issue is still present in your latest code at time of writing.
You've got a scoping issue in prep_localized_datetime, just the way python scoping works. Without a fix, means you potentially get weird behaviour, particularly if you have multiple LocalizedDateTimeFields on the one model. Anyway, attached is one possible suggestion to fix the issue.
N.B. I'm leaving django-land very shortly (end of contract), found this going through some old tickets prior to leaving, so I personally may not be contactable regarding this issue after this thursday (31st March 2011) (bound to be someone at ichec.ie available, just not dgoldenichec...)
fields.py/prep_localized_datetime(): Fix scoping issue.
Allow setting to None.
Merge remote branch 'brosner/master'