I'm sorry Ian, but this reads to me like knee-jerk abuse of Python's Unicode triggers knee-jerk abuse of dynamic typing. I disagree with you strongly on both points. I've worked with a lot of people who had the same initial complaints, and with a little bit of discipline and experience, they simply cease to have these sorts of problems, and they do not need to resort to such nasty hacks as changing sysdefault encoding.
And things are far from rosy in the ststically typed Java world, BTW. Static typing does not save any language from the complexities of Unicode. Python is well ahead of Java in some respects. And what of that complexity of Unicode? My thoughts here: