Patch #1272, by Christian Heimes and Alexandre Vassalotti.

Changes to make __file__ a proper Unicode object, using the default
filesystem encoding.
This is a bit tricky because the default filesystem encoding isn't
set by the time we import the first modules; at that point we fudge
things a bit.  This is okay since __file__ isn't really used much
except for error reporting.
Tested on OSX and Linux only so far.

Objects/unicodeobject.c

@@ -117,7 +117,11 @@ static PyUnicodeObject *unicode_latin1[256];
 
 /* Default encoding to use and assume when NULL is passed as encoding
    parameter; it is fixed to "utf-8".  Always use the
-   PyUnicode_GetDefaultEncoding() API to access this global. */
+   PyUnicode_GetDefaultEncoding() API to access this global.
+
+   Don't forget to alter Py_FileSystemDefaultEncoding() if you change the
+   hard coded default!
+*/
 static const char unicode_default_encoding[] = "utf-8";
 
 Py_UNICODE
@@ -1231,6 +1235,35 @@ PyObject *_PyUnicode_AsDefaultEncodedString(PyObject *unicode,
     return v;
 }
 
+PyObject*
+PyUnicode_DecodeFSDefault(const char *s)
+{
+    Py_ssize_t size = (Py_ssize_t)strlen(s);
+
+    /* During the early bootstrapping process, Py_FileSystemDefaultEncoding
+       can be undefined. If it is case, decode using UTF-8. The following assumes
+       that Py_FileSystemDefaultEncoding is set to a built-in encoding during the
+       bootstrapping process where the codecs aren't ready yet.
+    */
+    if (Py_FileSystemDefaultEncoding) {
+#if defined(MS_WINDOWS) && defined(HAVE_USABLE_WCHAR_T)
+        if (strcmp(Py_FileSystemDefaultEncoding, "mbcs")) {
+            return PyUnicode_DecodeMBCS(s, size, "replace");
+        }
+#elif defined(__APPLE__)
+        if (strcmp(Py_FileSystemDefaultEncoding, "utf-8")) {
+            return PyUnicode_DecodeUTF8(s, size, "replace");
+        }
+#endif
+        return PyUnicode_Decode(s, size,
+                                Py_FileSystemDefaultEncoding,
+                                "replace");
+    }
+    else {
+        return PyUnicode_DecodeUTF8(s, size, "replace");
+    }
+}
+
 char*
 PyUnicode_AsStringAndSize(PyObject *unicode, Py_ssize_t *psize)
 {