The game definitely looks at reputation in determining the "nervousness" of party members to others of different ethical persuasions. I think it may also take a glance at the charisma of the party leader, but I'm not sure.
@Alderion, for what it's worth, I suggest going out during the daytime, only, once you've declared your allegience to the Shadow Thieves, unless you've already run a bunch of the Chapter 2 quests. If you have a good cleric in your party, they should be able by then to cast the area effect spell, False Dawn (level 6). One or two of these will wipe out most undead. Bolt of Glory is also very good, but deals with only one opponent at a time.
To the Righteous belong the fruits of violent victory. The rest of us will have to settle for warm friends, warm lovers, and a wink from a quietly supportive universe.