>>+     current_buffer->undo_list =
 >>+       Fcons (Qnil, current_buffer->undo_list);
 >
 >
 > We should use Fundo_boundary here.

OK - tho' I'm not sure whether pending_boundary should be considered
here.  Note that I could remove that boundary and also combine the
insertion with a previous one if that's desired.  Personally, I'd prefer
to undo two separate insertions from files separately.  In this context
note that record_insert combines two insertions only if they happen in a
left-to-right way.  IIUC this should be eventually changed when Emacs
goes bi-directional.

 >>+   else if (inserted > 0
 >>+ 	   && (! EQ (original_undo_list, Qt))
 >>+ 	   && (NILP (visit)) && (NILP (replace)))
 >>+     /* Assure that the first insertion is counted as a change. */
 >>+     {
 >>+       current_buffer->undo_list = Qnil;
 >>+       record_first_change ();
 >>+     }
 >
 >
 > You use `else' between the two, but it's not clear why the two should be
 > mutually exclusive.  And please mention `visit' in the comment.

It's hopefully a bit clearer now although I'm not sure whether I need
the empty_undo_list check at all.  BTW, what is the semantics of
`insert-file-contents' with VISIT nil and REPLACE non-nil?

 > Also if the file is empty, is this going to mark the buffer as modified
 > even though nothing was changed?

I'm afraid I don't understand the question - do you mean the case where
inserted equals zero?  I don't handle that.  But maybe I'm missing
something.