First of all, let me say that your hack, Super Mario Unlimited, is coming along rather nicely, and I can see that you've put a lot of time, effort, and work into it. I'm not usually impressed by Super Mario hacks as there are so many already, and most of these are of questionable quality at best. (Extra Mario Bros. is a DEFINITE exception to this rule!

) But I am impressed by this, and have been looking forward to a quality Super Mario hack which brings the series back to it's roots. I thoroughly encourage you to keep up a job well done, as I am very much looking forward to playing this. In that regard, I would now like to offer a suggestion, since you've done such a great job on this already...
Skim-reading through this thread, it is my understanding that you plan on including unlimited lives in this hack. While this may be okay for some, I personally feel that it cheapens the challenge. However, I definitely agree that losing all of your lives in five minutes is not a good, valid way to play a hack like this either. So, building on your comment that you want to use the score counter for something to do with lives, how about this: Start Mario off with one life but turn the score register into a health counter!
Here's how it works: Mario starts the game with full health...we'll say a value of 3000 for balance's sake. Every time Small Mario collides with something which can kill him, he loses 450 points on the health counter but gets to keep going with temporary invincibility as if he had just downgraded from Super Mario. When Super or Small Mario falls down a pit, he loses either 150 or 300 points from the health counter depending on which mode he was in when he fell down said pit, and must start the level over from the beginning. (This makes acquiring Super Mario all the more desirable and also creates balance...do you risk a collision with Small Mario and keep going with less health, or risk a fall and have to start the level over?

) All collisions in Super Mario mode work as they did before, with a downgrade to Small Mario but no loss on the health counter. This is all assuming Mario hasn't yet reached "0" or less on that health counter, at which point the game ends. Now, when Mario successfully collects 100 coins, not only is he granted temporary invincibility like you said but it would be a great opportunity to replenish his health counter to 3000 (Full) since you have done away with 1UP mushrooms. These suggestions, I feel, would add balance to the game not only by emphasizing the importance of coin collection but also by giving the less skillful a good and fair chance to play the game all the way through without making it a total drop in the bucket. It's fair to assume that someone out there may someday attempt to put this on a cartridge and play this on the actual NES hardware...and using save states is just a litlle...um...difficult to do on actual hardware. (Unfortunately!)
Since scoring would not be of importance, you may also want to consider adding a level select on the title screen much like the one in "Toad's Adventure" so that the player may begin the game on any world/stage they so choose as a way to continue where they left off. It would be a shame, despite the changes made above, if the player were to reach 8-3 and lose the game by running out of health, and I believe that part of the charm of playing a ROMhack, both for the player and for the person who created it, is being allowed to see everything a ROMhacker has done to a game from the start rather than have to fight like mad to catch a fleeting glimpse of her/his great artwork and gameplay changes.

As a ROMhack author myself, I'd much rather create games which drop jaws rather than frustrate players who wish to see my changes. (Not saying that YOUR hack will frustrating, but you get the idea, it's an "ego" thing.

)
In the ROMhack I've done which is going through final playtesting pending upcoming release, I did things similar to the suggestions I made above, sans the health counter idea because that and removing scoring just wouldn't work considering the game in question that's been refurbished. I included a stage select, among other things, on the title screen of my game, and also a lives select which gives the player the option to start with as little as one or as many as seven lives and also an option to enable/disable the awarding of bonus lives throughout the game. I also added cheat switches for the game on Controller 2, one of which does not reduce the lives counter when the protagonist dies, and one of which that disables deadly collisions entirely!

The idea was, again, to allow the less skillful player to get a chance to see all of my work, even if they have to cheat to do it

. Hell, it beats using a Game Genie...
One more thing I'd like to add. Whatever you do with the "lives" functions of Super Mario Unlimited, it's important to keep in mind that 1UP mushrooms are not the only way to acquire bonus lives. I'm sure you've got the "coins" thing in the bag, but there is also scoring itself as well as enemy kills in succession which eventually lead to 1UPs which must be accounted for. If you don't intend for the player to get any 1UPs for whatever reason than it's important to keep an eye out for these things when working on your game.
But once again, very impressive job on this. Please keep up the good work, and I look forward to playing this.

Take care...