Hi,

Firstable i know how hard, or better to say "hot topic" is the PvP situation/whish in a roleplay environment with the multiple way of play (powergaming, optimisation, roleplay fanatic, casual player more_archetype_here etc).
In another hand i also prefere to fight against a player (particulary while it rewards and in any manner, but let's see the below for a PS application) than against any highly developed monster AI (which is mostly a mass of spell and possibility to manage for a player/group).

Before i enter the subject itself, i will speak about the base: The faction system.
This is in my opinion one of the nerves of this game, since it don't get stuck on "bad/evil" system(which seems to be not the case actually); subtility is the word.

For the moment, a part of the quest (almost 1/3, half of them) reward in a side or in another and are supposed to open/close some possibility(ies) in the futur of the game.
Then here is the overall "security counter mesure".

So as NPCs and PvM action (killing monsters from factions) will make those "faction status" evoluting, and give you some character mentality in a way, the actions player versus player (and not only fight) will also impact on this.
Least but not last each player belong a guild will also impact the overall guild faction status.

Some misc exemples to picture that mechanism:

A guy skilled in pickpocket from a guild of thief, will usually go for market to rob peasant. Imagine this same guy go on a miner camp or worth crafter, and repitidly.
if it does once a time, ok his faction status with miner/crafter will go down slow and wont impact relationship whith those faction, but if he starts to go more often ppl will start to spot him. (and his faction status will start to go down badly). For him, price for stuff will raise also badly or worth ppl will refuse to sel (or why no shout for guards)

Imagine this same guy inside the guild, all his action directly impacting the whole guild faction status, the leader if a bit wise will simply kick him out.

Let show now with this same thief the impact on guards, city etc. We can imagine system where ppl complain about: Kran, blue skin, leather armor, 2 short swords. (A name would be too much, when someone robe you you wont have any guess about it). There can be a process (simplier than what scotland yard would do) faking town guard investigation.
This would lead for still in the same way the way ppl will react (and better the why).

This same process can be applyed for guild tend to replace guard npc and much more.

Or imagine a guild of crafter that go with high price for selling object and low quality, they could loose many contact (what about a customer faction?).

Finally, the PvP (as stated in many common mmorpg actually) would result only if 2 players are really high in 2 opposite ways, or maybe a window like "Are you sure you want to do that" (which would reflect the conscience). would be possible, would be "roleplay" since when you make choice you go on what you like(or want) but with drawback.

Before this black suited assassin of doom enter a town in a sunny days or that white wizard 80 years old standing on bridge wanting to fight[add_here_high _evel_mob_name], he should really know what he is doing.

This rough, this breif, probably this system/code would require an entire dedicated server or a load of resources, but it would simply fit the actual mind of that game.

Sincerly,

Why Not.