This page indicates that Greek letters can be inserted into Emacs by using M-i. However, Emacs 23.2.1 in a Debian Squeeze variant inserts the \"tab\" character when
M-i
M-x set-input-method RET TeX will allow you to write e.g. \beta to get β, \sum or \Sigma to get Σ etc.
set-input-method RET TeX
\beta
β
\sum
\Sigma
Σ
It can be toggled on and off with toggle-input-method, bound to C-\ and C-<.
toggle-input-method