Dear Jon,

> 1. Is there a utility or computer program (Perl, Php, etc) that will
> convert Velthuis to unicode Pali with diacritical marks? Or a Word macro?

http://dhamma.ru/paali/macros.zip

> 2. Technical question: If you write Pali without diacritical marks or
> Velthuis, is it possible for a computer program to infer the
> diacritical marks from the context of the letters in a word? Is there
> a converter that does this?

No.

> 3. There are so many Pali fonts. Which one is the best to use?

Times Ext Roman.

> Is Pali not included in the Unicode engine?

See http://www.dhamma.ru/sadhu/modules/mylinks/viewcat.php?cid=119

With metta, Dmytro