diff --git a/CHANGELOG b/CHANGELOG
index f16c46ec5..c24ae1285 100644
--- a/CHANGELOG
+++ b/CHANGELOG
@@ -12,13 +12,21 @@
 - Fix issue #766 by removing documentation references to distutils.
   Thanks Russel Winder.
 
+- Fix issue #1030: now byte-strings are escaped to produce item node ids
+  to make them always serializable.
+  Thanks Andy Freeland for the report and Bruno Oliveira for the PR.
+
+- Python 2: if unicode parametrized values are convertible to ascii, their
+  ascii representation is used for the node id.
+
 - Fix issue #411: Add __eq__ method to assertion comparison example.
   Thanks Ben Webb.
 - Fix issue #653: deprecated_call can be used as context manager.
 
-- fix issue 877: propperly handle assertion explanations with non-ascii repr
+- fix issue 877: properly handle assertion explanations with non-ascii repr
   Thanks Mathieu Agopian for the report and Ronny Pfannschmidt for the PR.
 
+- fix issue 1029: transform errors when writing cache values into pytest-warnings
 
 2.8.0
 -----------------------------
@@ -196,8 +204,6 @@
 - fix issue714: add ability to apply indirect=True parameter on particular argnames.
   Thanks Elizaveta239.
 
-- fix issue714: add ability to apply indirect=True parameter on particular argnames.
-
 - fix issue890: changed extension of all documentation files from ``txt`` to
   ``rst``. Thanks to Abhijeet for the PR.
 
diff --git a/CONTRIBUTING.rst b/CONTRIBUTING.rst
index 7cb0d64dd..8e7055699 100644
--- a/CONTRIBUTING.rst
+++ b/CONTRIBUTING.rst
@@ -153,11 +153,11 @@ but here is a simple overview:
     $ cd pytest
     # now, to fix a bug create your own branch off "master":
     
-        $ git checkout master -b your-bugfix-branch-name
+        $ git checkout -b your-bugfix-branch-name master
 
     # or to instead add a feature create your own branch off "features":
     
-        $ git checkout features -b your-feature-branch-name
+        $ git checkout -b your-feature-branch-name features
 
    Given we have "major.minor.micro" version numbers, bugfixes will usually 
    be released in micro releases whereas features will be released in 
diff --git a/_pytest/cacheprovider.py b/_pytest/cacheprovider.py
index 977647fee..a1f728d9c 100755
--- a/_pytest/cacheprovider.py
+++ b/_pytest/cacheprovider.py
@@ -69,10 +69,22 @@ class Cache(object):
                like e. g. lists of dictionaries.
         """
         path = self._getvaluepath(key)
-        path.dirpath().ensure_dir()
-        with path.open("w") as f:
-            self.trace("cache-write %s: %r" % (key, value,))
-            json.dump(value, f, indent=2, sort_keys=True)
+        try:
+            path.dirpath().ensure_dir()
+        except (py.error.EEXIST, py.error.EACCES):
+            self.config.warn(
+                code='I9', message='could not create cache path %s' % (path,)
+            )
+            return
+        try:
+            f = path.open('w')
+        except py.error.ENOTDIR:
+            self.config.warn(
+                code='I9', message='cache could not write path %s' % (path,))
+        else:
+            with f:
+                self.trace("cache-write %s: %r" % (key, value,))
+                json.dump(value, f, indent=2, sort_keys=True)
 
 
 class LFPlugin:
@@ -174,8 +186,20 @@ def pytest_configure(config):
 
 @pytest.fixture
 def cache(request):
+    """
+    Return a cache object that can persist state between testing sessions.
+
+    cache.get(key, default)
+    cache.set(key, value)
+
+    Keys must be strings not containing a "/" separator. Add a unique identifier
+    (such as plugin/app name) to avoid clashes with other cache users.
+
+    Values can be any object handled by the json stdlib module.
+    """
     return request.config.cache
 
+
 def pytest_report_header(config):
     if config.option.verbose:
         relpath = py.path.local().bestrelpath(config.cache._cachedir)
diff --git a/_pytest/python.py b/_pytest/python.py
index 95388ffcb..6548cdbf5 100644
--- a/_pytest/python.py
+++ b/_pytest/python.py
@@ -32,6 +32,9 @@ exc_clear = getattr(sys, 'exc_clear', lambda: None)
 # The type of re.compile objects is not exposed in Python.
 REGEX_TYPE = type(re.compile(''))
 
+_PY3 = sys.version_info > (3, 0)
+_PY2 = not _PY3
+
 
 if hasattr(inspect, 'signature'):
     def _format_args(func):
@@ -912,7 +915,7 @@ class Metafunc(FuncargnamesCompatAttr):
 
         :arg argvalues: The list of argvalues determines how often a
             test is invoked with different argument values.  If only one
-            argname was specified argvalues is a list of simple values.  If N
+            argname was specified argvalues is a list of values.  If N
             argnames were specified, argvalues must be a list of N-tuples,
             where each tuple-element specifies a value for its respective
             argname.
@@ -1037,6 +1040,35 @@ class Metafunc(FuncargnamesCompatAttr):
         self._calls.append(cs)
 
 
+if _PY3:
+    def _escape_bytes(val):
+        """
+        If val is pure ascii, returns it as a str(), otherwise escapes
+        into a sequence of escaped bytes:
+        b'\xc3\xb4\xc5\xd6' -> u'\\xc3\\xb4\\xc5\\xd6'
+
+        note:
+           the obvious "v.decode('unicode-escape')" will return
+           valid utf-8 unicode if it finds them in the string, but we
+           want to return escaped bytes for any byte, even if they match
+           a utf-8 string.
+        """
+        # source: http://goo.gl/bGsnwC
+        import codecs
+        encoded_bytes, _ = codecs.escape_encode(val)
+        return encoded_bytes.decode('ascii')
+else:
+    def _escape_bytes(val):
+        """
+        In py2 bytes and str are the same, so return it unchanged if it
+        is a full ascii string, otherwise escape it into its binary form.
+        """
+        try:
+            return val.encode('ascii')
+        except UnicodeDecodeError:
+            return val.encode('string-escape')
+
+
 def _idval(val, argname, idx, idfn):
     if idfn:
         try:
@@ -1046,7 +1078,9 @@ def _idval(val, argname, idx, idfn):
         except Exception:
             pass
 
-    if isinstance(val, (float, int, str, bool, NoneType)):
+    if isinstance(val, bytes):
+        return _escape_bytes(val)
+    elif isinstance(val, (float, int, str, bool, NoneType)):
         return str(val)
     elif isinstance(val, REGEX_TYPE):
         return val.pattern
@@ -1054,6 +1088,14 @@ def _idval(val, argname, idx, idfn):
         return str(val)
     elif isclass(val) and hasattr(val, '__name__'):
         return val.__name__
+    elif _PY2 and isinstance(val, unicode):
+        # special case for python 2: if a unicode string is
+        # convertible to ascii, return it as an str() object instead
+        try:
+            return str(val)
+        except UnicodeDecodeError:
+            # fallthrough
+            pass
     return str(argname)+str(idx)
 
 def _idvalset(idx, valset, argnames, idfn):
diff --git a/_pytest/terminal.py b/_pytest/terminal.py
index 21bdc9fc9..ce4a88bc0 100644
--- a/_pytest/terminal.py
+++ b/_pytest/terminal.py
@@ -22,7 +22,7 @@ def pytest_addoption(parser):
     group._addoption('-r',
          action="store", dest="reportchars", default=None, metavar="chars",
          help="show extra test summary info as specified by chars (f)ailed, "
-              "(E)error, (s)skipped, (x)failed, (X)passed (w)warnings (a)all.")
+              "(E)error, (s)skipped, (x)failed, (X)passed (w)pytest-warnings (a)all.")
     group._addoption('-l', '--showlocals',
          action="store_true", dest="showlocals", default=False,
          help="show locals in tracebacks (disabled by default).")
diff --git a/testing/python/metafunc.py b/testing/python/metafunc.py
index 04e4a4aeb..d0df62f81 100644
--- a/testing/python/metafunc.py
+++ b/testing/python/metafunc.py
@@ -129,11 +129,12 @@ class TestMetafunc:
                                       (object(), object())])
         assert result == ["a0-1.0", "a1-b1"]
         # unicode mixing, issue250
-        result = idmaker((py.builtin._totext("a"), "b"), [({}, '\xc3\xb4')])
-        assert result == ['a0-\xc3\xb4']
+        result = idmaker((py.builtin._totext("a"), "b"), [({}, b'\xc3\xb4')])
+        assert result == ['a0-\\xc3\\xb4']
 
     def test_idmaker_native_strings(self):
         from _pytest.python import idmaker
+        totext = py.builtin._totext
         result = idmaker(("a", "b"), [(1.0, -1.1),
                                       (2, -202),
                                       ("three", "three hundred"),
@@ -143,7 +144,9 @@ class TestMetafunc:
                                       (str, int),
                                       (list("six"), [66, 66]),
                                       (set([7]), set("seven")),
-                                      (tuple("eight"), (8, -8, 8))
+                                      (tuple("eight"), (8, -8, 8)),
+                                      (b'\xc3\xb4', b"name"),
+                                      (b'\xc3\xb4', totext("other")),
         ])
         assert result == ["1.0--1.1",
                           "2--202",
@@ -154,7 +157,10 @@ class TestMetafunc:
                           "str-int",
                           "a7-b7",
                           "a8-b8",
-                          "a9-b9"]
+                          "a9-b9",
+                          "\\xc3\\xb4-name",
+                          "\\xc3\\xb4-other",
+                          ]
 
     def test_idmaker_enum(self):
         from _pytest.python import idmaker
@@ -312,7 +318,6 @@ class TestMetafunc:
             "*uses no fixture 'y'*",
         ])
 
-    @pytest.mark.xfail
     @pytest.mark.issue714
     def test_parametrize_uses_no_fixture_error_indirect_true(self, testdir):
         testdir.makepyfile("""
@@ -333,7 +338,6 @@ class TestMetafunc:
             "*uses no fixture 'y'*",
         ])
 
-    @pytest.mark.xfail
     @pytest.mark.issue714
     def test_parametrize_indirect_uses_no_fixture_error_indirect_list(self, testdir):
         testdir.makepyfile("""
diff --git a/testing/test_cache.py b/testing/test_cache.py
index 8eac4e8e0..20a6cf78a 100755
--- a/testing/test_cache.py
+++ b/testing/test_cache.py
@@ -1,3 +1,4 @@
+import sys
 import pytest
 import os
 import shutil
@@ -25,6 +26,36 @@ class TestNewAPI:
         val = config.cache.get("key/name", -2)
         assert val == -2
 
+    def test_cache_writefail_cachfile_silent(self, testdir):
+        testdir.makeini("[pytest]")
+        testdir.tmpdir.join('.cache').write('gone wrong')
+        config = testdir.parseconfigure()
+        cache = config.cache
+        cache.set('test/broken', [])
+
+    @pytest.mark.skipif(sys.platform.startswith('win'), reason='no chmod on windows')
+    def test_cache_writefail_permissions(self, testdir):
+        testdir.makeini("[pytest]")
+        testdir.tmpdir.ensure_dir('.cache').chmod(0)
+        config = testdir.parseconfigure()
+        cache = config.cache
+        cache.set('test/broken', [])
+
+    @pytest.mark.skipif(sys.platform.startswith('win'), reason='no chmod on windows')
+    def test_cache_failure_warns(self, testdir):
+        testdir.tmpdir.ensure_dir('.cache').chmod(0)
+        testdir.makepyfile("""
+            def test_pass():
+                pass
+
+        """)
+        result = testdir.runpytest('-rw')
+        assert result.ret == 0
+        result.stdout.fnmatch_lines([
+            "*could not create cache path*",
+            "*1 pytest-warnings*",
+        ])
+
     def test_config_cache(self, testdir):
         testdir.makeconftest("""
             def pytest_configure(config):
@@ -238,6 +269,22 @@ class TestLastFailed:
         lastfailed = config.cache.get("cache/lastfailed", -1)
         assert not lastfailed
 
+    def test_non_serializable_parametrize(self, testdir):
+        """Test that failed parametrized tests with unmarshable parameters
+        don't break pytest-cache.
+        """
+        testdir.makepyfile(r"""
+            import pytest
+
+            @pytest.mark.parametrize('val', [
+                b'\xac\x10\x02G',
+            ])
+            def test_fail(val):
+                assert False
+        """)
+        result = testdir.runpytest()
+        result.stdout.fnmatch_lines('*1 failed in*')
+
     def test_lastfailed_collectfailure(self, testdir, monkeypatch):
 
         testdir.makepyfile(test_maybe="""