I haven't weighed in on this one, mainly because I don't even need ISO-1, let alone Unicode, (and damned proud of it, too!). But Fredrik's glob example was horrifying.
I do know that I am always concious of whether a particular string is a sequence of characters, or a sequence of bytes. Seems to me the Py3K answer is to make those separate types. Until then, I guess I'll just remain completely xenophobic (and damned proud of it, too!).