Martin recently asked what the best way to roll his own encoding in .Net 2.0, in particular can you override Encoding/Encoder/Decoder, or should he write his own StreamWriter.
#1 is, of course, to use Unicode :), but apparently Martin doesn't have that option.
The answer is that you can write your own Encoding derived from the Encoding class and use it as any of the built-in Encodings. They'll be a little slower in some cases due to some shortcuts we take internally, but otherwise you should be able to use them everywhere you use a normal Encoding/Encoder/Decoder object.
There's an example of using the fallbacks at http://windowssdk.msdn.microsoft.com/en-us/library/tt6z1500.aspx, which isn't quite the same thing, but might help a little.
[updated 12 Oct 2006]I've stuck an example of overriding encodings in this post: Example of overriding your own Encoding.