Well, if you're willing/ready to switch to Python 3 (which you may not be due to the backwards incompatibility with some Python 2 code), you don't have to do any converting; all text in Python 3 is represented with Unicode strings, which also means that there's no more usage of the u'<text>'
syntax. You also have what are, in effect, strings of bytes, which are used to represent data (which may be an encoded string).
http://docs.python.org/3.1/whatsnew/3.0.html#text-vs-data-instead-of-unicode-vs-8-bit
(Of course, if you're currently using Python 3, then the problem is likely something to do with how you're attempting to save the text to a file.)