There are two ways to call replace.

Let us start by defining a string:

In [19]: s = "set([u'"

We can call the replace method of string s:

In [20]: s.replace("u'", "")
Out[20]: 'set(['

Or, we can call the replace of the class str:

In [21]: str.replace(s, "u'", "")
Out[21]: 'set(['

The latter way requires three arguments because str. That is why you received the error about missing arguments.

What went wrong

Consider the code:

for line in inHandler:

    str = str.replace("set([u'", "")
    str = str.replace("'", "")
    str = str.replace("u'", "")
    str = str.replace("'])", "")

First, note the goal is to replace text in line but nowhere in the calls to replace is the variable line used for anything.

The first call to replace generates the error:

>>> str.replace("set([u'", "")
Traceback (most recent call last):
  File "<stdin>", line 1, in <module>
TypeError: replace() takes at least 2 arguments (1 given)

Used in the above form, str.replace interprets its first argument as the string to replace. It is as if you wrote:

"set([u'".replace("")

In other words, it thinks that set([u' is the string to operate on and the replace function was given just one argument: the empty string. That it why the message is replace() takes at least 2 arguments (1 given).

What you need is to operate on the variable line:

line = line.replace("set([u'", "")

And so on for the remaining lines in the loop.

Conclusion: you have two issue:

• error: wrong syntax for str.replace
• abuse: the Python reserved key str

error: wrong syntax for str.replace

for error TypeError: replace() takes at least 2 arguments (1 given)

the root cause is:

your code

str = str.replace("set([u'", "")

intension is to use str.replace do replace work

the correct (one) syntax is:

newStr = oldStr.replace(fromStr, toStr[, replaceCount])

corresponding to your code, could be:

replacedLine = line.replace("set([u'", "")

Note: another syntax is:

newStr = str.replace(oldStr, fromStr, toStr[, replaceCount])

for full details please refer another post's answer

abuse: the Python reserved key str

• background knowledge
  • str is Python reserved key word
    • means: the name of String class in Python 3
      • str has many builtin functions
        • such as: str.replace(), str.lower()
    • also means: you should NOT use str as normal variable/function name

so your code:

for line in inHandler:
    str = str.replace("set([u'", "")

should change to (something like this):

for line in inHandler:
    newLine = line.replace("set([u'", "")

or

for line in inHandler:
    newLine = str.replace(line, "set([u'", "")

I think this should work.

for s in inHandler:

    s = s.replace("set([u'", " ")  ## notice the space between the quotes
    s = s.replace("'", " ")
    s = s.replace("u'", " ")
    s = s.replace("'])", " ")

Please refrain from using built-in data types as variables (like you have used str).

You could compress the four lines of replace code

str = str.replace("set([u'", "")
str = str.replace("'", "")
str = str.replace("u'", "")
str = str.replace("'])", "")

as,

str = re.sub(r"set\(\[u'|u'|'\]\)|'", r"", str)

Example:

>>> import re
>>> string = "foo set([u'bar'foobaru''])"
>>> string = re.sub(r"set\(\[u'|u'|'\]\)|'", r"", string)
>>> string
'foo barfoobar'

I modified your code as below:

inHandler = open('test.txt', 'r')
outHandler = open('test1.txt', 'w')
data = ''
for line in inHandler.readlines():
    print 'src:' + line
    line = line.replace("set([u'", "")
    line = line.replace("u'", "")
    line = line.replace("'])", "")
    line = line.replace("'", "")
    data += line
    print 'replace:' + line
outHandler.write(data)

inHandler.close()
outHandler.close()

And I tested it. Result:

src:set([u'adg',u'dafasdf'])
replace:adg,dafasdf
src:set([u'adg',u'dafasdf'])
replace:adg,dafasdf
src:set([u'adg',u'dafasdf'])
replace:adg,dafasdf

if you are referring to str.replace (string) inbuild function in python then

str.replace(old, new[, count])
    Return a copy of the string with all occurrences of substring old replaced by new. 
    If the optional argument count is given, only the first count occurrences are replaced.

Means you need to give 2 values.

And you are using line as variable so you can try.

local_string = ''
for line in inHandler:
    local_string = line
    local_string = local_string.replace("set([u'", "")
    local_string = local_string.replace("'", "")
    local_string = local_string.replace("u'", "")
    local_string = local_string.replace("'])", "")