If I want to include a .eps image and yet use pdfLaTeX, I can do so using epstopdf (manually called, automated in TL2010+, using the package). However, as far as I know, all these options are incompatible with psfrag.
I would be interested in a utility, let's say psfragify, that would take a LaTeX source code, extract all .eps graphics that use \psfrag directives, and run latex+dvips(+ps2pdf) on them, to obtain corrected graphics that can be used in pdfLaTeX. Of course, this should solve the problem of using the correct fonts, too.
(If no such utility exists, I'm probably going to make one, but I would like to know whether the work has not been done before.)
pstool? – Joseph Wright♦ Feb 20 at 16:47