I tried to post this problem earlier, but it doesn't seem to have appeared. If it has now appeared twice, then I apologise and suggest you read the two stereoscopically.
/gluon/html.py in _fixup at line 1914 has the line
components.append(OPTION(c, _value=str(c)))
This call to str() coughs and explodes when presented with the string u"Max-Gu\xe9na\xebl" as it was in my application yesterday as part of a SELECT().
Should this be unicode-safe or am I expecting too much of web2py?