Alex,
The malayalam latex is a welcome thing for typesetting in our malayalam language.The "rachana" fonts used for this is also very good as it is a nice font package and now "rachana" fonts are released under GPL.(I am not sure about the licensing terms of "keli" fonts).But I feel that some glyphs for 'koottaksharam's(conjunts) in the "rachana" fonts aren't used at all.
But I am vary about the "mm" preprocessor( from Malayalam-tex 1.6 by Jeroen Hellingman) used by you. Its source is not permitted to distribute in the modified form without the consent from the author(see the "README" of Malayalam-tex 1.6).You could have used the "indica" preprocessor included with Sinhala_tex.2.1.1 which is licensed under GPL.
I have also made some modifications to the metafont files of the Malayalam-tex to add some veriety to the fonts.But I am unable to distribute the same because of the abovementioned clause.Now I have started to create some metafonts which provides different shapes by changing some parameters.
We should collectively make an attempt to make the Malayalam-tex released under GPL.
suresh p