Updated patch for 2.7 hg tip attached. Please review, test and if ok, port to 3.x.

I guess the URL needs to be quoted so commented out the assertion for the URL being equal. I added unquote in the base64 encoding of the password, which makes the test pass. Seems to work for me and no urllib tests were broken. Did not run others.

http://test.webdav.org/ has some basic auth test accounts configured if you want to try it out. You can use wireshark to grab the base64 from the unencrypted http. Fancy opener works for me with this now, too.