Django not recognizing a GeoDjango model

As GeoDjango is now integrated into Django framework, it should be
able to recognize GeoDjango models.

But, as soon as I add "from django.contrib.gis.db import models"
instead of "from django.db import models", Django stops recognizing
the app and gives this error:

Error: App with label location could not be found. Are you sure
your INSTALLED_APPS setting is correct?

The error goes away as soon as I comment out "from
django.contrib.gis.db import models"...

I have added "django.contrib.gis" and the "location" app to the
INSTALLED_APPS setting in settings.py.

Any clues why this is happening? I am running using Django v1.1.1
final, on my windows laptop.

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