$ ipython
In [1]: type(json.dumps({'a':'b'}, ensure_ascii=False))
Out[1]: <type 'str'>

In [2]: type(json.dumps({'a':u'b'}, ensure_ascii=False))
Out[2]: <type 'unicode'>
-----------------------
Documentation:
If ensure_ascii is False, then the return value will be a unicode instance.
--------------------------------

Not applicable to python3

Ezio, Raymond: is it the doc that is wrong?

The docstring says:
"""
    If ``ensure_ascii`` is false, then the return value will be a
    ``unicode`` instance subject to normal Python ``str`` to ``unicode``
    coercion rules instead of being escaped to an ASCII ``str``.
"""

It seems to me that when ensure_ascii is False, the return value will be a unicode instance if and only if there's a unicode object anywhere in the input.

>>> json.dumps({'foo': 'bar'}, ensure_ascii=False)
'{"foo": "bar"}'

>>> json.dumps({'foo': u'bar'}, ensure_ascii=False)
u'{"foo": "bar"}'

>>> json.dumps({'foo': u'äiti'}, ensure_ascii=False)
u'{"foo": "\xe4iti"}'

>>> json.dumps({'foo': u'äiti'.encode('utf-8')}, ensure_ascii=False)
'{"foo": "\xc3\xa4iti"}'

>>> json.dumps({'foo': u'äiti'.encode('utf-16')}, ensure_ascii=False)
'{"foo": "\xff\xfe\xe4\\u0000i\\u0000t\\u0000i\\u0000"}'

It may also be unicode if the encoding parameter is used even if there are no unicode objects in the input.

>>> json.dumps([u'Ş'.encode('iso-8859-9')], encoding='iso-8859-9', ensure_ascii=False)
u'["\u015e"]'

Attached a patch for 2.7 that updates docs and docstrings.

Attached an updated patch, which is more explicit on what ensure_ascii actually does.

Attached yet another patch. It explains what input causes the result to be unicode instead of str.

New changeset a1884b3027c5 by Petri Lehtinen in branch '2.7':
#13769: Enhance docs for ensure_ascii semantics in JSON decoding functions
http://hg.python.org/cpython/rev/a1884b3027c5

Fixed, thanks.