If for some reason you want to manually construct a list in the for loop, you would use the list append() method, perhaps because you want to lower-case all words (for example):
While The Python Language Reference describes the exact syntax and semantics of the Python language, this library reference manual describes the standard library that is distributed with Python. It also describes some of the optional components that are commonly included in Python distributions.
To help you choose from the various modules available, I think this talk (at pycon 2009), is what you're looking for (the guy has lots of experience on the matter).