If it's really just you and one other developer working on it, nightly builds are probably not going to give you much.
I would say that the web app equivalent of nightly builds would be staging sites (which can be built nightly).
Where nightly builds to a staging area start paying real dividends is when you have clients, project managers, and QA people that need to be able to see an up to date, but relatively stable version of the app. Your developer sandboxes (if you're like me, at least) probably spend a lot of time in an unusable state as you're breaking things trying to get the next feature implemented. So the typical problem is that a QA person wants to verify that a bug is fixed, or a PM wants to check that some planned feature was implemented correctly, or a client wants to see that you've made progress on the issue that they care about. If they only have access to developer sandboxes, there's a good chance that when they get around to looking at it, either the sandbox version isn't running (since it means ./manage.py runserver is up in a terminal somewhere) or it's in a broken state because of something else. That really slows down the whole team and wastes a lot of time.
It sounds like you don't have a staging setup since you just automatically update the production version. That could be fine if you're way more careful and disciplined than I (and I think most developers) am and never commit anything that isn't totally bulletproof. Personally, I'd rather make sure that my work has made it through at least some cursory QA by someone other than me before it hits production.
So, in conclusion, the setup where I work:
- each developer runs their own sandbox locally (same as you do it)
- there's a "common" staging sandbox on a dev server that gets updated nightly from a cronjob. PMs, clients, and QA go there. They are never given direct access to developer sandboxes.
- There's an automated (though manually initiated) deployment to production. A developer or the PM can "push" to production when we feel things have been sufficiently QA'd and are stable and safe.
I'd say the only downside (besides a bit of extra overhead setting up the nightly staging builds) is that it makes for a day of turnaround on bug verification. ie, QA reports a bug in the software (based on looking at that day's nightly build), developer fixes bug and commits, then QA must wait until the next day's build to check that the bug is actually fixed. It's usually not that much of a problem since everyone has enough stuff going on that it doesn't affect the schedule. When a milestone is approaching though and we're in a feature-frozen, bugfix only mode, we'll do more frequent manual updates of the staging site.