@Vinay.Sajip
After adding change you suggested i'm getting different error:
---
C:\Users\Jarosław>pip install virtualenv
Downloading/unpacking virtualenv
  Running setup.py (path:c:\users\jarosa~1\appdata\local\temp\pip_build_Jaros│a
\virtualenv\setup.py) egg_info for package virtualenv

    warning: no previously-included files matching '*' found under directory 'd
cs\_templates'
    warning: no previously-included files matching '*' found under directory 'd
cs\_build'
Cleaning up...
Exception:
Traceback (most recent call last):
  File "c:\python27\lib\site-packages\pip\basecommand.py", line 122, in main
    status = self.run(options, args)
  File "c:\python27\lib\site-packages\pip\commands\install.py", line 270, in ru

    requirement_set.prepare_files(finder, force_root_egg_info=self.bundle, bund
e=self.bundle)
  File "c:\python27\lib\site-packages\pip\req.py", line 1211, in prepare_files
    req_to_install.assert_source_matches_version()
  File "c:\python27\lib\site-packages\pip\req.py", line 451, in assert_source_m
tches_version
    % (display_path(self.source_dir), version, self))
UnicodeDecodeError: 'ascii' codec can't decode byte 0xb3 in position 62: ordina
 not in range(128)

Traceback (most recent call last):
  File "c:\python27\Scripts\pip-script.py", line 9, in <module>
    load_entry_point('pip==1.5', 'console_scripts', 'pip')()
  File "c:\python27\lib\site-packages\pip\__init__.py", line 185, in main
    return command.main(cmd_args)
  File "c:\python27\lib\site-packages\pip\basecommand.py", line 161, in main
    text = '\n'.join(complete_log)
UnicodeDecodeError: 'ascii' codec can't decode byte 0xb3 in position 77: ordina
 not in range(128)

C:\Users\Jarosław>
---

It looks like this needs a little more changes in pip to solve this issue.
What's strange: In Windows 8.1, name of home directory is first name saved in your Microsoft Profile (if you log via this profile of course), so it should be a pretty common issue (i think).

Thanks for your fast reaction and support.