Here's my two cents worth:
In Ireland 5,000ft is the Trans Alt.
The Lowest Useable FL is the Trans level and that is between 1,000ft and 1,499ft above the TA (depending on QNH) .
In my experience, traffic climbing changes to 1013 passing through 5,000ft and reverts to QNH as he descends through whatever the Trans Level is at that time.
If the pilot changes is altimeter settings early it won't provide a false altitude indication as the Mode-C transmissions are all based on standard pressure. The radar software will convert the recieved Mode-C info and display it already adjusted to QNH if the aircraft is below the Trans Level. The only way a loss of separation should occur as a result of this is if the controller (having already cleared descent to Altitude) decides to stop descent at a FL, the pilot does not re-adjust his altimiter, and he levels off at an Altitude at or above the Trans level causing conflictions with other traffic operating on FL.
As for overlapping sectors with different TAs, there should be co-ord channels available between the controllers responsibile and the aircraft should change altimeter settings a specified time/distance before the boundary. The details should be in the LOA between the two sectors.