Attaching new patch. This patch is for 2.7 (as you suggested earlier, since it's easy to forward-port to py3k with 2to3) and affects Misc/NEWS, Lib/trace.py and Lib/test/test_trace.py (which is added).

In Lib/trace.py:
- Fixed the problem with class names (taken from Alexander's patch for py3k) when tracing methods. Documented this change in Misc/NEWS. Note that I did not include the __annotations__ change because I wasn't sure how it applies to 2.x

Lib/test/test_trace.py:
Added new unit-testing file for the trace module. Changes since the last patch:

- Implemented the changes suggested by Alexander (a few more nitpicks) in http://bugs.python.org/issue9315#msg111592, except changing fake* to test* because I thought test* in this context is confusing with the main purpose of the code (testing), and fake* conveys the meaning pretty well.

- Added tests for tracing instance methods (not yet class methods or static methods because the semantics of tracing these aren't 100% clear to me yet), and for generators and list comprehensions.