XeTeX always converts, say, c + combining caron into a ccaron whenever one exists in the font
Does it really? I had understood from the last discussion on the XeTeX list that it did not, with the example of capital alpha + combining breathing which was not set correctly. But maybe it's LaTeX's fault?
In the case of LM, the font has combining characters with zero width with the accent shifted to the left, so that it looks OK on an average glyph
That's a nice trick, but in the case of 'l', it looks really ugly.
(but in general, TeX does a better job with combining characters) unless one requests two accents.
Sure.
So, either ccaron or c+combining caron (or l+combining tilde) should behave the same way:
Yes, of course. This is Unicode canonical equivalence, explained in the links Idris gave in the Unicode Standard (chapter 2 is "Introduction", chapter 3 is "Conformance", and we may be concerned by chapter "Implementation guidelines", too).
Also, {\v x} and other strange combinations don't work in ConTeXt (I guess it does in plain TeX) since ConTeXt MK II uses a clever way to figure out if such characters exist in the font encoding
Mapping sequences like "\v c" to the appropriate slot in the current font encoding is quite legitimate; LaTeX does the same with its own font encodings. I didn't know it meant things like "\v x" couldn't be displayed, though. That said, it is something different from supporting combining characters. Arthur