No, we don't touch the binary content of the file - it is just what is streamed to the server. More details on the document type, size and how you're getting it into Alfresco would help.
There is a recent Forge project which *does* allow you to embed metadata in documents, effectively, the reverse of metadata extraction. There's a few example embedders.
I am trying to see if Alfresco can install custom properties into pdf and word files when they are uploaded or moved into an Alfresco folder. Is this possible?
Also, I have heard there is a feature whereby Alfresco can take the details on a cover page of a word document and scrape them off and log them as the metadata. Is this correct?
You have a few choices for injecting your properties into content. You could have a rule or policy which transforms the content on writing or I see that there are a set of projects on the alfresco forge that may be suitable. For example, http://forge.alfresco.com/projects/metadatawriter/