codecs.readline has an internal buffer of 72 chars so calling codecs.open with buffering=0 doesn't work as expected although buffering is passed to the underlying __builtin__.open call.

Example session:

Python 3.2a3+ (py3k, Nov  6 2010, 16:17:14) 
[GCC 4.5.1] on linux2
Type "help", "copyright", "credits" or "license" for more information.
>>> import codecs
>>> f = codecs.open("foo.txt", "w", "utf-8")
>>> word = "bar\n"
>>> content = word * 1000
>>> f.write(content)
>>> f.close()
>>> f = codecs.open("foo.txt", "rb", "utf-8", buffering=0)
>>> f.readline()
'bar\n'
>>> f.tell()
72