I still use OT1 for French and will continue until new fonts
   appear in public domain with the same quality as CM fonts for
   the 128-255 range.


With mltex presumably? Using standard TeX isn't this exactly equivalent
to using a VF based re-encoding of the cm fonts such as ae fonts?
You get the benefits of T1 encoding for hyphenation, so long as you
don't require any of the extra glyphs that were added to T1.
This is a reasonable solution to the "freely available T1 cm fonts"
problem in many cases (It's what I use in the MathML spec which uses
T1 encoded times mainly but ae version of cmtt for monospaced)


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