First of all install python-dev
sudo apt-get install python-dev
And to adecuate use try this:
This is to do with the encoding of your terminal not being set to UTF-8. Here is my terminal:
$ echo $LANG
es_UY.UTF-8
$ python
Python 2.7.3 (default, Apr 20 2012, 22:39:59)
[GCC 4.6.3] on linux2
Type "help", "copyright", "credits" or "license" for more information.
>>> s = '(\xef\xbd\xa1\xef\xbd\xa5\xcf\x89\xef\xbd\xa5\xef\xbd\xa1)\xef\xbe\x89'
>>> s1 = s.decode('utf-8')
>>> print s1
(。・ω・。)ノ
>>>
If I unset I got the same error you got:
$ unset LANG
$ python
Python 2.7.3 (default, Apr 20 2012, 22:39:59)
[GCC 4.6.3] on linux2
Type "help", "copyright", "credits" or "license" for more information.
>>> s = '(\xef\xbd\xa1\xef\xbd\xa5\xcf\x89\xef\xbd\xa5\xef\xbd\xa1)\xef\xbe\x89'
>>> s1 = s.decode('utf-8')
>>> print s1
Traceback (most recent call last):
File "<stdin>", line 1, in <module>
UnicodeEncodeError: 'ascii' codec can't encode characters in position 1-5: ordinal not in range(128)
>>>