I've also got unicode codec error. 
When i'm trying to create issue with title with non-ascii characters 
i've got:

Traceback (most recent call last):
  File "/usr/local/lib/python2.7/site-packages/roundup/cgi/client.py", 
line 1122, in renderContext
    result = pt.render(self, None, None, **args)
  File "/usr/local/lib/python2.7/site-packages/roundup/cgi/
engine_jinja2.py", line 78, in render
    return self._tpl.render(c).encode('utf-8', )
  File "/usr/local/lib/python2.7/site-packages/jinja2/environment.py", 
line 969, in render
    exc_info = sys.exc_info()
  File "/usr/local/lib/python2.7/site-packages/jinja2/environment.py", 
line 742, in handle_exception
    exc_type, exc_value, tb = traceback.standard_exc_info
  File "/usr/local/www/r2/html/issue.item.html", line 1, in top-level 
template code
    {% extends 'layout/page.html' %}
  File "/usr/local/www/r2/html/layout/page.html", line 17, in top-level 
template code
    {% block page_content %}
  File "/usr/local/www/r2/html/layout/page.html", line 42, in block 
"page_content"
    {% block content %}
  File "/usr/local/www/r2/html/issue.item.html", line 67, in block 
"content"
    <pre>{{ msg.content.hyperlinked() }}</pre>
UnicodeDecodeError: 'ascii' codec can't decode byte 0xd0 in position 0: 
ordinal not in range(128)

I'm ensure that all form-data are utf-8 encoded. Also i applied patch 
from msg4892. But no luck.

I don't fully understand where and why 'ascii' codec is used.