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If I want my application to be bullet-proof against external libraries that can (and often do) raise Exception(u'nonascii'), I cannot use python's logger.exception() directly, as it will end up with UnicodeDecodeError. 
The reason is hidden in Formatter.format() which does:
 s = self._fmt % record.__dict__
One can use his own formatter that can handle UnicodeDecodeError, but many users are quite unaware of such issue and it would be great if Python can handle it by itself.
Here is a simple case.
>>> e = Exception(u'ą')
>>> logging.basicConfig()
>>> logging.getLogger('general').exception(u'ą')
ą
None
>>> logging.getLogger('general').exception(e)
Traceback (most recent call last):
 File "/usr/lib/python2.7/logging/__init__.py", line 842, in emit
 msg = self.format(record)
 File "/usr/lib/python2.7/logging/__init__.py", line 719, in format
 return fmt.format(record)
 File "/usr/lib/python2.7/logging/__init__.py", line 467, in format
 s = self._fmt % record.__dict__
UnicodeEncodeError: 'ascii' codec can't encode character u'\u0105' in position 0: ordinal not in range(128)
Logged from file <stdin>, line 1
>>> unicode(e)
u'\u0105'
>>> str(e)
Traceback (most recent call last):
 File "<stdin>", line 1, in <module>
UnicodeEncodeError: 'ascii' codec can't encode character u'\u0105' in position 0: ordinal not in range(128)
>>>

This is happening because if you pass an object instead of a string as the first argument in a logging call, it's treated as a message object whose __str__() will be called to get the actual message when it's needed, as documented here:
http://docs.python.org/howto/logging.html#arbitrary-object-messages
If, instead, you do it like this:
# coding: utf-8
import logging
logging.basicConfig()
try:
 raise Exception(u'ą')
except Exception:
 logging.getLogger('general').exception(u'An error occurred')
you get
ERROR:general:An error occurred
Traceback (most recent call last):
 File "bug_12339.py", line 6, in <module>
 raise Exception(u'ą')
Exception: \u0105