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I'm in favor for the "let files be their own iterator and set .next equal to .readline" solution. The above example can _really_ bite you.

The current xreadlinesmodule.c could be converted to a standalone module, if it really is necessary to optimize.

The trivial solution for this problem is to change CHUNKSIZE (in Modules/xreadlinesmodule) to 1. Or, even better, to convert it into an instance variable, so you can do this:

f=open(...)
fi=f.iter(chunk=2000)
for line in fi:
    ...

if you want speed, or just write

for line in f:

(which internally converts to f.iter(chunk=1))

if you want safety.

I'm not too firm with Python C interfacing, otherwise I'd write a patch... any takers?