python: unicode in Windows terminal, encoding used?

Unicode is not an encoding. You encode into byte strings and decode into Unicode:

>>> '\x89'.decode('cp437')
u'\xeb'
>>> u'\xeb'.encode('cp437')
'\x89'
>>> u'\xeb'.encode('utf8')
'\xc3\xab'

The windows terminal uses legacy code pages for DOS. For US Windows it is:

>>> import sys
>>> sys.stdout.encoding
'cp437'

Windows applications use windows code pages. Python’s IDLE will show the windows encoding:

>>> import sys
>>> sys.stdout.encoding
'cp1252'

Your results may vary.