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Where os.listdir encounters undecodable bytes from the filesystem it uses the surrogateescape handler. As the resulting strings are invalid they can't be encoded without an errorhandler, and so can't be printed (for example).
This should be documented.

Can you please write a doc patch?

Added a small patch to mention surrogateescape and PEP 383.

Patch looks good, apart from a missing "the", but I think it should be expanded: Right now it tells that surrogateescape is used, but IMO it would be more useful if it also mentioned practical implications, i.e. what Michael "The Beard" Foord says in the first message.

I think this was added in another section of this doc. See the second paragraph in 
https://docs.python.org/3/library/os.html#file-names-command-line-arguments-and-environment-variables 

> I think this was added in another section of this doc. See the second paragraph in 
> https://docs.python.org/3/library/os.html#file-names-command-line-arguments-and-environment-variables
Right, this section now explains encodings and the error handler.
Moreover, I recently reworked the documentation of the filesystem encoding and error handler:
* https://docs.python.org/dev/glossary.html#term-filesystem-encoding-and-error-handler
* https://docs.python.org/dev/library/os.html#python-utf-8-mode
* https://docs.python.org/dev/library/sys.html#sys.getfilesystemencoding
* etc.
I consider that it's now enough, I close the issue ;-) If someone wants to enhance the doc, please submit a PR. This issue is now quite old :-)