Standard libraries (xmlrpclib+SimpleXMLRPCServer in Python 2 and xmlrpc.server in Python 3) report all errors (including usage errors) as python exceptions which is not suitable for public services: exception strings are often not easy understandable without python knowledge and might expose some sensitive information. It's not hard to fix this, but I prefer to avoid reinventing the wheel. Is there a third party library with better error reporting? I'm interested in good fault messages for all usage errors and hiding internals when reporting internal errors (this is better done with logging).
xmlrpclib already have the constants for such errors: NOT_WELLFORMED_ERROR, UNSUPPORTED_ENCODING, INVALID_ENCODING_CHAR, INVALID_XMLRPC, METHOD_NOT_FOUND, INVALID_METHOD_PARAMS, INTERNAL_ERROR.
I don't think you have a library specific problem.  When using any library or framework you typically want to trap all errors, log them somewhere, and throw up "Oops, we're having problems.  You may want to contact us at x@x.com with error number 100 and tell us what you did."  So wrap your failable entry points in try/catches, create a generic logger and off you go...
XML-RPC server with better error reporting