I get the feeling that the problem is with the Python interactive mode. It does not have full unicode support, so u"Žabovitá zmiešaná kaša" is changed to u'\x8eabovit\xe1 zmie\x9aan\xe1 ka\x9aa'. If you call your code from another program, it might work correctly.
-- André Engels, andreeng...@gmail.com -- http://mail.python.org/mailman/listinfo/python-list