The undead pirate RPG site SkullPort, has a very well done and easy to read chat log from the incredibly recent (as in an hour ago) chat at RPGVault. Here's some bark:
Q: I wonder how and if these things are handled in the game. Can I take my theif character, attack a merchant, steal his money and run away only to come back the next day and have him treat me as a valued customer?
A: We've been working on the reputation system over the last week. If you don't script your merchant, you could =] The default will probably be that the merchant will have forgotten most of the earlier transgression, but a lot of NPCs are like elephants. They never forget the really bad things that happen. In a persistant setting you could have that merchant have as long a memory ars you want. Withint he few hours of a module though, we may be a little more forgiving.