I have regenerated the patch against emacs-23 branch with a small tweak
that is nick completion no longer inserts a space (same as in the
original completion) if it is in the middle of an input.

I wonder if it is possible to apply this patch first and then think
about using the new completion-in-region-functions. I think this is a
safer step. completion-in-region-functions can be problematic when more
than one mode customise it though I haven't looked into this in full.
But I currently have TeX and a minor mode uses
completion-in-region-functions and I have been surprised a few times.