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The xmllib.XMLParser seems to be unable to parse 
an XML file that contains 0xc3 0x9f (UTF8 representation
of the german ß).
Python 2.0 (Linux i386) always give me the following 
traceback:
suxlap@/tmp/xx(2)% python test.py test.xml
<?xml version="1.0" encoding="UTF-8" ?>
<test>Ãxüöä</test>
Traceback (most recent call last):
 File "test.py", line 20, in ?
 pp.feed(data)
 File "/opt/python-2.0/lib/python2.0/xmllib.py", line 165, in feed
 self.goahead(0)
 File "/opt/python-2.0/lib/python2.0/xmllib.py", line 261, in goahead
 self.syntax_error('illegal character in content')
 File "/opt/python-2.0/lib/python2.0/xmllib.py", line 786, in syntax_error
 raise RuntimeError, 'Syntax error at line %d: %s' % (self.lineno, message)
RuntimeError: Syntax error at line 3: illegal character in content 
Other UTF8 characters seem to work