In any virtual world there are not the breadth nor depth of interactions that one finds in the \'real world\'. In the real world, people have Google, newspapers, police, courts, and media.
In days past, public order was maintained by expulsion, with resultant loss of access to resources and to the collective efforts of others. Those expelled made their living off the land as scavengers or bandits. Those that chose to live as bandits, if caught, were drawn and quartered and have their heads stuck on pikes as a warning to those who would choose this path.
Now, I propose a PlaneShift version of this to deal with all the miscreants...

Allow player killing. Allow stealing of kills. Allow all negative behaviour which is legitimate within roleplay. However, these actions have consequence depending on the context of the action.
If a player attacks another player (but does not kill them, i.e. assault) within sight, sound or reasonable discovery of other players or non-evil NPCs, then the offending player should lose a chunk of their reputation which is commensurate with the offence. Loss of reputation makes it difficult for them to be served by merchants of good or lawful alignment -- and increases the likelihood that they will be refused entry to the city or community in the future.
Significant loss of reputation (such when the offender kills a player other than in self-defence) will cause the player to be arrested or executed on sight by city guards, and/or perhaps cause the posting of a bounty for their heads by the city. If the player (character) is clever/lucky enough to escape and commit further crimes, then good luck to them -- the bounty increases as does the desire of the authorities to bring the miscreant to some form of justice (i.e. execution or imprisonment). This will probably cause the formation of a posse by some enterprising or vengeful group of players (guild membership does bring benefits -- just kill a guild member and suffer their wrath) and eventually result in the death of the offending player.
Incidentally reputations (both good and bad) should decay slowly with time -- as does people\'s memories -- with the result that an occasional small misdeed will be easily forgotten after a short time, while even large misdeeds can take much, much longer.
Now, death is not much of a deterrent is it? Here\'s how it can be. Once dead, if the character died with a poor reputation (less than a certain value), then the character is dead -- completely and irreversibly -- OR the character is stuck in hell for a few hours/days/weeks (actual time), depending on how poor their reputation is.
They should also not be rewarded for their actions, so a goodly portion of their possesions can be traded with the death god to \'wipe the slate clean\' so that they can be reborn with a \'neutral\' reputation (i.e. joe average). If they don\'t trade, then they get reborn with the reputation they had when they died (but one won\'t be so mean as to respawn them in Hydlaa Plaza!)
Incidentally, some of you may think that this favours Lawful and Good characters too much. Well, there\'s a good RP reason for this. Cities and communities not only depend on lawful conduct -- they define what lawful conduct is. Lawful conduct is that which does not weaken or threaten the community. Evil characters (but not Lawful Evil in the AD&D sense) directly challenge the viability of the community and emphasize antisocial behaviour (i.e. unlawful in the RP sense) that favours their personal position or gain. As a side note, it\'s interesting that Lawful Evil characters should actually do quite well in the cities, since they are careful not to \'kill the golden goose\', but instead aim to \'milk it for all it\'s worth\' (if you\'ll pardon the deliberate mixed metaphors).
If we want it RP and we want it \'real\', let sociopathic characters have a taste of what that means in \'real\' terms.

BTW: Incidentally, if any developers want to know how to manage reputation using a systemtic approach, they are welcome to contact me for information on the relevant mathematical calculus and engineering details (yeah yeah boring I know but someone\'s gotta build the damn thing).