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 Goliath is converted with Holy Grail. He then goes out.As his ability states
Goliath (P)
Type: Evil Char. • Brigade: Black • Ability: 10 / 10 • Class: Warrior • Special Ability: Return all Heroes in battle to territory (except giant-slayers). Opponent may present a new Hero. Negate all band, draw, and play abilities. Cannot be negated. • Identifiers: OT Male Giant (Human), Philistia • Verse: I Samuel 17:44 • Availability: Promotional cards (2010 Regional Tournament)
Does he return himself to his owners territory or not.

I don't think so because I heard somewhere that when an evil character is converted they lose any ability that harms a hero.

I think this was changed to "cannot target a hero." Otherwise, I agree with Irish Luck. Neither of the first two abilities convert since they would target a hero. However, the third ability would still activate.