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
You can use ucs-insert bound to
C-x8RET to insert any Unicode
characters by name or by value.
For example to insert a lambda you can do
GREEK SMALL LETTER LAMBDA RET → λ03bb RET → λA tab-completion is also available.
C-x8RET* lambdaTAB
will list every unicode characters ended by a lambda.