Obviously The Champion of Cyrodil (Skyrim) should be a bit of a celebrity, but I also think you should be known for lesser things, like if you are caught killing people. At least in the city the person is from. In Oblivion you would basically just be fined and everything would be forgotten, but I think it would make more sense that if you killed someone someone ought to know that person and when you later go up and talk to them they would say like "oh my god you killed freddy! What the hell man!"or something.. Can't remember if their disposition was lowered when you got caught killing in Oblivion, but I just think that's a bit lame...

Hehe, awesome Just shows how absurd situations you can end up with in games of this magnitude/depth. That's the price for full freedom, you can't cover all eventualities.

I do think NPCs who have the ability to be informed to know about you. But at the same time some backwater Nord who hasn't talked with another man in four years probably shouldn't know about you. A modification of the faction system from Fallout New Vegas might work. Faction "Fame" from one group could slowly bleed over into another if the two are allowed to do so. The rate at which the spread would vary by a modifier in the faction information.

For example:
Rick slayed five dragons in Anytown and gains 25 fame with the Anytown faction. Anytown people interact with Everytown faction people, and as such, gains 5 fame with Everytown. The dragons however, dislike Rick and he gains 50 infame with the Dragon faction.

Fame and Infamy could be faction exclusive. With large groups and the ability to spread fame via proxy factions, then a person can still become famous or infamous through their actions, just in a slightly more believable way than before. This could also let a character become famous in some circles and infamous in others.

I think that there should be consequences for joining an opposing faction when you are already a member of certain factions. I think wanton killing should haunt you, if say, you want to join the Imperial Army, but having a record for assault, murder, and looting should inhibit it. You can't worship the imperial gods and belong to a local religious sect and not expect consequences. Necromancy and the Mages Guild would probably be mutually exclusive. It would most certainly add more challenges to the gaming experience.

I agree that you shouldn't be able to finish everything in one play through. That adds a lot more to the game and will make you want to replay it often. You can be a mage character in one play through and an assassin in another for example.