I'm also in favor of disambiguating parameter names in plpgsql with the "p_" prefix. It's easier to read than "function_name__", especially when the function name is something besides "new". It also visually matches the convention of "v_" as the prefix for local variable names (which is occasionally followed by arsdigita).
It's not too late to reach a consensus among the non-core package porters, and put this in the Guidelines document as a coding standard. Since there's nothing in there at the moment, people will inevitably make up their own schemes for parameter and variable naming.
