Right now, on my system (OS X 10.4), only Adobe Reader 8.0 does copy-paste correctly, and it does it correctly no matter if I use babel or Unicode input.
You mean with LuaTeX? Copypasting isn't supported yet in LuaTeX so it's no surprise that it wouldn't work (for me Adobe Reader and Preview fail in two different ways). As for pdfTeX I leave that to Taco and others to answer. But hyphenation is another important issue, maybe even clearer.
I guess that different sorts of users would respond differently. In Unicode, there's a different slot for some alternate characters, so the Unicode standard really considers them different characters.
Actually, now I think about it, the name for U+03F2 has "symbol" in it, and that's a clear indication that the character is intended for "technical use", not for inputting Greek text; so your choice is consistent with the intent of the Standard.
Wonderful! I will look carefully at these files. I've been playing with perl and python all day yesterday for another problem, so I'm very much looking forward to studying your script.
Somewhere in the middle of writing it, I realized that I should have written it in Lua :-) It wouldn't have been much different. Arthur