I checked the latest documentation for 3.1.1
(http://docs.python.org/3.1/library/imaplib.html), but I can't find any
reference to needing to encode information myself for the login
procedure. Is there some other documentation you are referring to?

In any case, the error wasn't returned by the server, but by imaplib. If
the arg needs to be encoded for the whole process, then the arg should
be checked for the appropriate type (I think the doc even says "plain
text password"), or an optional encoding argument for the relevant
functions (or a catchall used when connecting to the server?) with a
default encoding attempted.