diff --git a/IPython/Release.py b/IPython/Release.py
index 89f5a8a..8c49f6b 100644
--- a/IPython/Release.py
+++ b/IPython/Release.py
@@ -1,7 +1,7 @@
 # -*- coding: utf-8 -*-
 """Release data for the IPython project.
 
-$Id: Release.py 2281 2007-04-27 11:08:18Z vivainio $"""
+$Id: Release.py 2297 2007-04-30 11:08:46Z vivainio $"""
 
 #*****************************************************************************
 #       Copyright (C) 2001-2006 Fernando Perez <fperez@colorado.edu>
@@ -25,7 +25,7 @@ name = 'ipython'
 revision = '2280'
 
 #version = '0.8.1.svn.r' + revision.rstrip('M')
-version = '0.8.1.rc2'
+version = '0.8.1.rc3'
 
 description = "An enhanced interactive Python shell."
 
diff --git a/IPython/iplib.py b/IPython/iplib.py
index e2c5693..e95c8d4 100644
--- a/IPython/iplib.py
+++ b/IPython/iplib.py
@@ -6,7 +6,7 @@ Requires Python 2.3 or newer.
 
 This file contains all the classes and helper functions specific to IPython.
 
-$Id: iplib.py 2266 2007-04-22 18:55:48Z jstenar $
+$Id: iplib.py 2297 2007-04-30 11:08:46Z vivainio $
 """
 
 #*****************************************************************************
@@ -659,8 +659,15 @@ class InteractiveShell(object,Magic):
         self.rc already has reasonable default values at this point.
         """
         rc = self.rc
-        
-        self.db = pickleshare.PickleShareDB(rc.ipythondir + "/db")
+        try:
+            self.db = pickleshare.PickleShareDB(rc.ipythondir + "/db")            
+        except exceptions.UnicodeDecodeError:
+            print "Your ipythondir can't be decoded to unicode!"
+            print "Please set HOME environment variable to something that"
+            print r"only has ASCII characters, e.g. c:\home"
+            print "Now it is",rc.ipythondir
+            sys.exit()
+            
     
     def post_config_initialization(self):
         """Post configuration init method
diff --git a/doc/ChangeLog b/doc/ChangeLog
index 67a790f..8d9bf1f 100644
--- a/doc/ChangeLog
+++ b/doc/ChangeLog
@@ -1,3 +1,8 @@
+2007-04-30  Ville Vainio  <vivainio@gmail.com>
+
+	* iplib.py: (pre_config_initialization) Catch UnicodeDecodeError if the
+	user has illegal (non-ascii) home directory name
+
 2007-04-27  Ville Vainio  <vivainio@gmail.com>
 
 	* platutils_win32.py: implement set_term_title for windows
@@ -5,7 +10,6 @@
 	* Update version number
 	
 	* ipy_profile_sh.py: more informative prompt (2 dir levels)
-	
 
 2007-04-26  Walter Doerwald  <walter@livinglogic.de>