You must be using Python 2 because it's default behavior for the decode() method is to use the "ascii" codec which can't handle any bytes greater than 0x7f , while Python 3 switched to the "utf8" codec which does handle all kinds of bytes.

Running Pywallet using Python 3 is going to remove this error, but I notice your stack trade also has json_db[type] = 'unsupported'. Which points to one of two possibilities:

- either your friend gave you a weird wallet.dat that has an unsupported field in the database, or:
- 2 you are using an experimental build of pywallet and cloned the Github repo while jackjack was updating stuff.

I'm inclined to think it is the second possibility so can you try rolling back to an older commit by running "git checkout COMMIT_ID_You_get_from_github"?