From Originator:
First, thanks for the replies.
Second, yes I did mean above HEX 7F, and not HEX FF.
Third, I should have mentioned I am using perl v5.8.0, running on Windows 98. Perl runs in DOS mode, so there is an additional level of obscurity in that DOS and Windows have different character sets (Code Pages 850 and 1252 respectively), but I don't think this is my problem.
Fourth, Windows doesn't have locale as far as I can see, so no solution there.
Finally, utf8::upgrade seems to do the trick, but I am confused about how utf8::downgrade knows what to downgrade to.