I am trying to explore more about web service in Python/Django and to be honest i am quite confused. There are so many things like SOAPpy, XML-RPC, JSON-RPC RESTful, web service.
Basically all i want to know is what is the standard way of implementing web service in Python/Django and has anyone implemented in live production environment
There isn't a 'standard' way, but a lot of people (including me) have used -- and like! -- Django Piston, which is actually also used to create the web service for BitBucket (where piston's source is hosted)
Also, if you're still learning about web services, I can highly recommend the O'Reilly book RESTful Web Services -- although it's a book with a focus on REST (which I agree is the best design pattern for a web service) it also explains RPC and SOAP, too.
There are so many things like SOAPpy, XML-RPC, JSON-RPC RESTful, web service.
This should give you a clue - there are different services out there that use one or more of these mechanisms.
Basically all i want to know is what is the standard way of implementing web service in Python/Django and has anyone implemented in live production environment
There is no single standard way of implementing a web service. This is as true for Django/Python as for other web frameworks.
Different people have used Django in different ways to create a web service to suit their needs.