New patch attached, tested against Python 3.2. This is my first Python patch so apologies if I've done something wrong here. Feedback appreciated!
Changes:
* fit everything to 80 cols
* just made changes to the HTMLParser.unescape function instead of providing a standalone unescape function
* fixed test case to fix string literals to work in python 3k
* left the cp1252 hacks in there since it looks like they work still, but if there's a problem with them let me know. In practice I have to this at work in order to make unescaping actual web pages work.