--- a/babel/messages/frontend.py
+++ b/babel/messages/frontend.py
@@ -197,13 +197,15 @@
 
     description = 'create new catalogs based on a catalog template'
     user_options = [
+        ('domain=', 'D',
+         "domain of PO file (defaults to lower-cased project name"),
         ('input-file=', 'i',
          'name of the input file'),
         ('output-dir=', 'd',
          'path to output directory'),
         ('output-file=', 'o',
          "name of the output file (default "
-         "'<output_dir>/<locale>.po')"),
+         "'<output_dir>/<locale>/<domain>.po')"),
         ('locale=', 'l',
          'locale for the new localized catalog'),
         ('first-author=', None,
@@ -217,69 +219,64 @@
         self.output_file = None
         self.input_file = None
         self.locale = None
+        self.domain = None
         self.first_author = None
         self.first_author_email = None
 
     def finalize_options(self):
         if not self.input_file:
             raise DistutilsOptionError('you must specify the input file')
+        
+        if not self.domain:
+            self.domain = self.distribution.get_name().lower()
 
         if not self.locale:
             raise DistutilsOptionError('you must provide a locale for the '
-                                       'new catalog')
+                                       'new catalog')            
         else:
             try:
-                locale = Locale.parse(self.locale)
+                self._locale = Locale.parse(self.locale)
             except UnknownLocaleError, error:
                 log.error(error)
                 sys.exit(1)
 
-        self._locale_parts = self.locale.split('_')
-        self._language = None
-        self._country = None
-        _locale = Locale('en')
-        if len(self._locale_parts) == 2:
-            if self._locale_parts[0] == self._locale_parts[1].lower():
-                # Remove country part if equal to language
-                locale = self._locale_parts[0]
-            else:
-                locale = self.locale
-            self._language = _locale.languages[self._locale_parts[0]]
-            self._country = _locale.territories[self._locale_parts[1]]
-        else:
-            locale = self._locale_parts[0]
-            self._language = _locale.languages[locale]
+        if self._locale.territory.lower() == self._locale.language:
+            # Remove country part if equal to language
+            # XXX: This might not be the best behaviour, investigate
+            self.locale = self._locale.language
 
         if not self.output_file and not self.output_dir:
             raise DistutilsOptionError('you must specify the output directory')
 
         if not self.output_file and self.output_dir:
-            self.output_file = os.path.join(self.output_dir, locale + '.po')
+            self.output_file = os.path.join(self.output_dir,
+                                            self.locale,
+                                            self.domain + '.po')
+            if not os.path.exists(os.path.dirname(self.output_file)):
+                os.makedirs(os.path.dirname(self.output_file))
 
     def run(self):
         outfile = open(self.output_file, 'w')
         infile = open(self.input_file, 'r')
 
-        if PLURALS.has_key(self.locale):
-            # Try <language>_<COUNTRY>
-            plurals = PLURALS[self.locale]
-        elif PLURALS.has_key(self._locale_parts[0]):
+        if PLURALS.has_key(str(self._locale)):
+            # Try <language>_<COUNTRY> if passed by user
+            plurals = PLURALS[str(self._locale)]
+        elif PLURALS.has_key(self._locale.language):
             # Try <language>
-            plurals = PLURALS[self._locale_parts[0]]
+            plurals = PLURALS[self._locale.language]
         else:
             plurals = ('INTEGER', 'EXPRESSION')
 
-        if self._country:
-            logline = 'Creating %%s (%s) %%r PO from %%r' % self._country + \
-                      ' PO template'
-        else:
-            logline = 'Creating %s %r PO from %r PO template'
-        log.info(logline, self._language, self.output_file, self.input_file)
+        log.info('Creating %s %r PO from %r PO template',
+                 self._locale.english_name,
+                 self.output_file,
+                 self.input_file)
 
-        write_po(outfile, infile, self._language, country=self._country,
+        write_po(outfile, infile, self._locale,
                  project=self.distribution.get_name(),
                  version=self.distribution.get_version(),
-                 charset=self.charset, plurals=plurals,
+                 plurals=plurals,
                  first_author=self.first_author,
                  first_author_email=self.first_author_email)
         infile.close()
@@ -487,4 +484,4 @@
 
 
 if __name__ == '__main__':
-    extract_cmdline()
+    main()

--- a/babel/messages/pofile.py
+++ b/babel/messages/pofile.py
@@ -344,13 +344,15 @@
             _write('msgstr ""\n')
         _write('\n')
 
-def write_po(fileobj, input_fileobj, language, country=None, project='PROJECT',
+def write_po(fileobj, input_fileobj, locale_obj, project='PROJECT',
              version='VERSION', first_author=None, first_author_email=None,
              plurals=('INTEGER', 'EXPRESSION')):
     r"""Write a ``gettext`` PO (portable object) file to the given file-like 
     object, from the given input PO template file.
     
     >>> from StringIO import StringIO
+    >>> from babel import Locale
+    >>> locale_obj = Locale.parse('pt_PT')
     >>> inbuf = StringIO(r'''# Translations Template for FooBar.
     ... # Copyright (C) 2007 ORGANIZATION
     ... # This file is distributed under the same license as the
@@ -380,12 +382,12 @@
     ... msgstr ""
     ... ''')
     >>> outbuf = StringIO()
-    >>> write_po(outbuf, inbuf, 'English', project='FooBar',
+    >>> write_po(outbuf, inbuf, locale_obj, project='FooBar',
     ...          version='0.1', first_author='A Name', 
     ...          first_author_email='user@domain.tld',
     ...          plurals=(2, '(n != 1)'))
     >>> print outbuf.getvalue() # doctest: +ELLIPSIS
-    # English Translations for FooBar
+    # Portuguese (Portugal) Translations for FooBar
     # Copyright (C) 2007 ORGANIZATION
     # This file is distributed under the same license as the
     # FooBar project.
@@ -428,13 +430,9 @@
     in_header = True
     for index in range(len(inlines)):
         if in_header:
-            if '# Translations Template' in inlines[index]:
-                if country:
-                    line = '# %s (%s) Translations for %%s\n' % \
-                                                            (language, country)
-                else:
-                    line = '# %s Translations for %%s\n' % language
-                outlines.append(line % project)
+            if '# Translations Template' in inlines[index]:                
+                outlines.append('# %s Translations for %s\n' % \
+                                (locale_obj.english_name, project))                
             elif '# FIRST AUTHOR <EMAIL@ADDRESS>, YEAR.' in inlines[index]:
                 if _first_author:
                     outlines.append(