I wouldn't mind if a certain amount of time had passed, due to rumors and news having circulated. Them knowing that that particular (race) was the Hero, well...*shrug*
Maybe they should do that. You know, as an easter egg or a wink at the players. You show up and witness someone freaking out over someone who looks like an adventurer, but had nothing to do with it. I think that'd be neat.
However, if you'd done enough quests, or a particularly important one, you'd have the option to say a few different things if asked about any possible relation to your reputation.
"Hey, are you the one who killed that Dragon in Shady Forest?"
A) Yes, yes I am. What, you need help too?
B) What crap floweth from thyne mouth? Forsooth!
C) Why are you talking to me again?
Or something. :whistling: