The main source of problems I've had working with unicode strings is when you mix utf-8 encoded strings with unicode ones.

For example, consider the following scripts.

two.py

# encoding: utf-8
name = 'helló wörld from two'

one.py

# encoding: utf-8
from __future__ import unicode_literals
import two
name = 'helló wörld from one'
print name + two.name

The output of running python one.py is:

Traceback (most recent call last):
  File "one.py", line 5, in <module>
    print name + two.name
UnicodeDecodeError: 'ascii' codec can't decode byte 0xc3 in position 4: ordinal not in range(128)

In this example, two.name is an utf-8 encoded string (not unicode) since it did not import unicode_literals, and one.name is an unicode string. When you mix both, python tries to decode the encoded string (assuming it's ascii) and convert it to unicode and fails. It would work if you did print name + two.name.decode('utf-8').

The same thing can happen if you encode a string and try to mix them later. For example, this works:

# encoding: utf-8
html = '<html><body>helló wörld</body></html>'
if isinstance(html, unicode):
    html = html.encode('utf-8')
print 'DEBUG: %s' % html

Output:

DEBUG: <html><body>helló wörld</body></html>

But after adding the import unicode_literals it does NOT:

# encoding: utf-8
from __future__ import unicode_literals
html = '<html><body>helló wörld</body></html>'
if isinstance(html, unicode):
    html = html.encode('utf-8')
print 'DEBUG: %s' % html

Output:

Traceback (most recent call last):
  File "test.py", line 6, in <module>
    print 'DEBUG: %s' % html
UnicodeDecodeError: 'ascii' codec can't decode byte 0xc3 in position 16: ordinal not in range(128)

It fails because 'DEBUG: %s' is an unicode string and therefore python tries to decode html. A couple of ways to fix the print are either doing print str('DEBUG: %s') % html or print 'DEBUG: %s' % html.decode('utf-8').

I hope this helps you understand the potential gotchas when using unicode strings.