> However, it is a real change from 2.6 to 2.7 that breaks code.

John, this issue is not the same as the one above.  The difference between Python 2.6 and Python 2.7.2 you mention only applies to % formatting.
The change is clearly documented in http://docs.python.org/dev/whatsnew/2.7.html
"""It’s now possible for a subclass of the built-in unicode type to override the __unicode__() method."""

This is clearly a bug in the application.  There are many ways to break compatibility with bogus code...