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If any directory higher up in the hierarchy contains unicode chars, tarfile.open fails with UnicodeDecodeError. Attached script reproduces this error.
[tmp]% python tarfilefail.py 
Traceback (most recent call last):
 File "tarfilefail.py", line 9, in <module>
 tarfile.open(file_name, 'w')
 File "/usr/lib/python2.6/tarfile.py", line 1682, in open
 return cls.taropen(name, mode, fileobj, **kwargs)
 File "/usr/lib/python2.6/tarfile.py", line 1692, in taropen
 return cls(name, mode, fileobj, **kwargs)
 File "/usr/lib/python2.6/tarfile.py", line 1527, in __init__
 self.name = os.path.abspath(name) if name else None
 File "/usr/lib/python2.6/posixpath.py", line 338, in abspath
 path = join(os.getcwd(), path)
 File "/usr/lib/python2.6/posixpath.py", line 70, in join
 path += '/' + b
UnicodeDecodeError: 'ascii' codec can't decode byte 0xe2 in position 17: ordinal not in range(128)
[tmp]%