You posted a very simple description of a faction system I don't like "Good" and "Evil" because they are very subjective. But we will have something in place that gets you more "points" with one faction, or another. It will influence quests, how you are perceived by NPCs, etc.

Great, that would be just wonderfull!

What about a good and evil sistem to help with the RP in the players. Based on what you kill (evil creatures, good creatures, neutral creatures) you could have 2 bars that would fill up really slowly in order to make your alignment good or evil , or just keep it neutral
What would be the benifits of this (Besides players going "Muhahahaha, I'm soo evil"):
1- NPCs could react diferently acording to your alignment, dont forget that fear is a form of persuasion and certain NPCs may give certain quest to evil players, although religious and  order loving NPCs would not give quests or repond rudely to evil players, but they would treat the good and kind players nicely.
2-There could also be certain perks, such as magic boosts, like Red and Dark Way for evil players, and the same, only with diferent Ways of magic,for good players.
3- Roleplaying could also improve as players could start demonstrating more amrking in-game personalities as they are kind adn good or rotten and evil.
4- There could aslo be some special skills or magics for players well aligned with "Good" or "Evil", not to mention special quests.

Just another ideia
"Hope it's better than my last ones"

How is this different from our current situation with trainers? What is the exact difference and exact benefit? :]

Well come to think of it, it could be easier just to give players a map of the cities, or install a mini map system. Because I was really thinking of something that would make it easier for players to obtain certain specific skills and items, because it can be hard to find a trainer in a town and once you realized that the skill you want to train is not available in any trainer in that town and you have to walk all that distance...
Anyway, there would also be the benefit of the 1st arena actually working like a self-learning centre for newcommer players in order to help them learn how the game runs.

It's not fun to have everything centralized and basically have the game decide on how you make your way through the world.
I don't like it.

I never said that yu would have to be somehow pledged to a House, besides they would not be all int he same town, some of them could not even be in towns, it woudl a place were players woudl travell to learn certain skills and buy certain items. and the basic arena is just a place for newcommers to earn some progression poins (a very few amount really like 2 or 3) and learn how to talk to NPCs (it would avoi the "Help me I cant get a quest, how do I ask?etc.."). But I'm jsut brainstorming here..If people dont like it then people dont like it

Well it is jsut somehting that I think would make the game a bit better..
Various training arenas but not to work as tutorials, areas where:
1 - In the first arena, you could battle "Dummies" (big bags of sand possibly shaped like humanoids) that wouldn't attack you (for a very limited time of course) in order to gain the very 1st or the very first few progression points, and there should also be some sort of trainer that would train the basics (STR, DEX, WILL, INT) until theese reached a certain level, the player could leave this zone any time he wants
2 - From this point on I'm assuming the players after the first arena have played for quite some time and now they can choose specific such as "training houses", for example, The House of Crafters, or, The House of Thieves, or even, The House of Mages/Paladins/Necromancers/etc.., of course in theese homes you could not find training dummies, but a small group of NPCs that teach skills related to a specific class and sell items for that class, and possibly some quests as well.
Just a small ideia..

Check laanx.fragnetics.com - if the reported time matches the current time and there are players on, the server is available. If the times differ by several minutes or there are no players online, it's "officially" down.

yea as for me it differs in several hours, but it still says that players are online, but it's day 17/02/2007, but it says there that it is day 28/02/2007 and it's like 6 hours ahead of my time...