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I've updated the PEP to describe how this approach should be
used: Python 2.3 still should generate warnings only for
using non-ASCII without declared encoding. I, too, hope that
Mr Suzuki will update the patch to match the PEP, and for
the CVS tree.

As for supporting UTF-16: The stream reader currently has
the .readline method disabled, since it won't work reliable
for little-endian. So I think this should be an undocumented
feature at the moment; I see no other technical problems
with the approach taken in the patch.